Paddle,Inc.purchased equipment for $14,760 on February 1,2015.The equipment has a useful life of 3 years.How much depreciation expense should Paddle recognize on its income statement for 2015?

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Quizplus · Accepted Answer

The equipment has a useful life of 3 years, so the annual depreciation expense is $14,760 / 3 = $4,920. Since the equipment was purchased on February 1, 2015, only 11 months of depreciation expense should be recognized in 2015. Therefore, the depreciation expense for 2015 is $4,920 * 11/12 = $4,510.