Bricker Enterprises purchased a machine for $100,000 on October 1,2018.The estimated service life is ten years with a $10,000 residual value.Bricker records partial-year depreciation based on the number of months in service.Depreciation expense for the year ended December 31,2018,using straight-line depreciation,is:
A)$1,500.
B)$7,500.
C)$2,250.

Question

Quizplus · Accepted Answer

First, we need to calculate the monthly depreciation expense:

($100,000 - $10,000) / (10 years x 12 months) = $750

Next, we need to determine the number of months in service from October 1, 2018, to December 31, 2018, which is 3 months.

Finally, we can calculate the depreciation expense for the year ended December 31, 2018:

3 months x $750 = $2,250.

Therefore, the correct answer is (C).

Bricker Enterprises Purchased a Machine for $100,000 on October 1,2018