In April 1st, Diagnostic tools and testing equipment with a useful life of 2 years were...
In April 1st, Diagnostic tools and testing equipment with a useful life of 2 years were purchased for cash in the amount of 23,460.
November 1st Equipment originally purchased on April 1st for $3,000 is sold for $1,500 cash . What is the accumulated depreciation and depreciation expense for the above transactions? Using the straight line method.
Homework Answers
Cost of equipment = $23,460
Useful life = 2 years
Annual depreciation = Cost of equipment / Useful life
= 23,460/2
= $11,730
In the current year, equipment has been used for 7 months ( from April to November) Depreciation expense for 7 months = Annual depreciation x 7/12
= 11,730 x 7/12
= $8,592.50
Accumulated depreciation = $8,592.50
Depreciation expense = $8,592.50
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