On April 8,2018,Jupiter Corp.acquired equipment at a cost of $480,000.The equipment is to be depreciated by the straight-line method over six years with no provision for salvage value.Depreciation for fractional years is computed by rounding the ownership period to the nearest month.Depreciation expense recognized in 2018 will be:
A)$53,333.
B)$66,667.
C)$60,000.
D)$80,000.

Question

Quizplus · Accepted Answer

The total depreciation expense over six years is $480,000. Annually, this is $480,000 / 6 = $80,000. Since depreciation starts from April 8, 2018, and the year ends on December 31, 2018, the depreciation for 2018 covers approximately 9 months. Thus, the depreciation expense for 2018 is ($80,000 / 12 months) * 9 months = $60,000.