The fixed assets have estimated useful lives as follows: Building- 31.5 years Co
ID: 2347795 • Letter: T
Question
The fixed assets have estimated useful lives as follows: Building- 31.5 years Computer Equipment- 5.0 years Office Equipment- 7.0 Years Use the straight-line method of depreciation. Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building 's scrap value is $7,500. The office equipment has a scrap value of $400. The computer equipment has no scrap value. Calculate the depreciation for one month. I know I should debt 3 accounts and credit 1 account but i'm not sure which accounts? I know to calculate straight-line depreciation you do (cost-residual value) x 1/life x #/12, but I don't know the residual value? So which 3 accounts should be debits, which account should be credit, and for how much?Explanation / Answer
You forgot to provide Cost of assets, Assuming respective costs as follows :
Building $115,000
Computer Equipment $5,200
Office Equipment $1,909
Calculate the depreciation for one month.
Building ($115,000 - $7,500) / 31.5 = $3,413 per year
Or $3,413 / 12 = $284.40 per month
Computer Equipment $5,200 / 5 = $1,040 per year
Or $1,040 / 12 = $86.67 per month
Office Equipment ($1,909 – 400) / 7 = $216 per year
Or $216 / 12 = $18 per month
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Depreciation on Building $284.40
Depreciation on Computer Equipment $86.67
Depreciation on office Equipment $18.00
Accumulated Depreciation $389.07
_____________________________________________________
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