Help 33% ACCT 201 Honors Fall 2017 Analiese Olivo 12/14/17 11:09 PM Test: FINAL

Question

Help 33% ACCT 201 Honors Fall 2017 Analiese Olivo 12/14/17 11:09 PM Test: FINAL EXAM Time Remaining: 01:37:02 Submit Test This Question: 1 pt 180f 40 (32 complete) This Test: 40 pts Equipment acquired on January 1,2014, is sold on June 30, 2018, for $11,200. The equipment cost $46,800, had an estimated residual value of $6,800, and an estimated useful life of 5 years. The company prepared financial statements on December 31, and the equipment has been depreciated using the straight-ine method. On June 30, 2018, the company should record Depreciation Expense of: O B. $4,000 O c. $8,000. OD $2,000. Click to select your answer

Explanation / Answer

SOLUTION

The company should record depreciation expense of $4,000.

Depreciation = (Purchase price - Salvage value) / Estimated useful life

= ($46,800-$6,800) / 5

= $40,000 / 5 = $8,000

Depreciation to be recordedon June 30, 2018 = $8,000*6/12 = $4,000

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