Answer:
December 31 1990 : Le 2100
December 31 1991 : Le 2800
December 31 1992 : Le 2800
Explanation:
Given the following :
Cost of equipment = 30,000
Number of Useful years = 10
scrap value = 2,000
depreciation account for the first 3 years in the life of the asset using the Straight line method :
Straight line Depreciation formula :
[ (Cost - scrap value ) / number of useful years]
YEAR 1:
Equipment was purchased on April 1st, that is only 9 of the 12 months will be used to calculate Depreciation in the first year.
December 31, 1990:
[ (30,000 - 2000) / 10 ] × (9/12)
2800 × 0.75 = Le 2100
December 31, 1991 :
[ (30,000 - 2000) / 10 ] × (12/12)
2800 × 1 = Le 2800
December 31, 1992:
[ (30,000 - 2000) / 10 ] × (12/12)
2800 × 1 = Le 2800
