The partial yr depreciation for yr 1 is a. $5,000.
The required details for Depreciation in given paragraph
$100,000/5 years = $20,000 per year x 1/4 year = $5,000 deprecation in year 1.
Depreciation is hence the lower withinside the fee of property and the technique used to reallocate, or "write down" the value of a tangible asset (inclusive of system) over its beneficial lifestyles span. Businesses depreciate long-time period property for each accounting and tax purposes.
The lower in fee of the asset impacts the stability sheet of a commercial enterprise or entity, and the technique of depreciating the asset, accounting-wise, impacts the internet earnings, and hence the earnings statement that they report.
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Complete question
On October 1, year 1, Kirby Corp. purchased equipment for $100,000. The equipment as an expected service life of 5 years with no residual value. Kirby uses the straight-line method of depreciation. The partial year depreciation for year 1 is: a. $5,000 b. $10,000 c. $2,500 d. $20,000
