Question

Equipment cost $67,200 and is expected to be useful for 8 years and have no salvage value. unde the straight line method, monthly depreciation will be?

Answer 1

The monthly depreciation will be $8000.

In accountancy, depreciation refers to two components of the equal idea: first, the real lower of fair fee of an asset, which include the lower in value of manufacturing unit gadget each year as it's far used .

Depreciation is used on a profits declaration for almost every enterprise. it is indexed as a cost, and so should be used every time an object is calculated for year-end tax purposes or to determine the validity of the item for liquidation purposes.

Annual depreciation is not taken into consideration as an asset because assets constitute something in order to produce financial cost to the organization during the last. And accumulated depreciation does now not produce the enterprise's financial fee as amassed depreciation itself shows the credit score stability.

Annual depreciation as per straight line method = ( 104,000 - $8,000) /10

Annual depreciation as per straight - line method = $96,000/10

Annual depreciation as per straight line method = $9600

∴ monthly depreciation as per straight line = $96000 * 1/12

                                                                       = $8000

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