Answer:
$490
Explanation:
Watson Tax Planning Service has the following plant assets:
Communications Equipment: Cost, $ 7,040 with useful life of eight years; Furniture: Cost, $ 24,000 with useful life of 12 years;
Computer: Cost, $ 12,000 with useful life of four years.
(Assume residual value of all the assets is zero.)
Watson's monthly depreciation expense calculated using the straight line method is $490.
Depreciation on Communications Equipment: Cost, $ 7,040 / 8 years / 12 months = 73.3
Depreciation on Furniture: Cost, $ 24,000 / 12 years / 12 months = 166.7
Depreciation on Computer: Cost, $ 12,000 / 4 years / 12 months = 250
Total monthly depreciation = $490
Answer:
Total monthly depreciation expense for Watson Tax Planning Service is $490
Explanation:
Straight-line depreciation is calculated by the formula
= (Cost - Residual value) / Useful life
Monthly Straight-line depreciation for:
Communications equipment = [($7,040 - 0) / 8 years] / 12 months
= $73.33
Furniture = [($24,000 - 0) / 12 years] / 12 months
= $166.66
Computer = [($12,000 - 0) / 4 years] / 12 months
= $250
Total monthly depreciation expense = $73.33 + $166.66 + $250
= $490
