Answer:
B
Explanation:
The value to depreciate is always the total asset value minus the salvage value. In this case, $23,000-$3000=$20,000. The straight line method formula is:
Depreciation = value to depreciate/useful years
Depreciation (year) = $20,000/5= $4,000
This formula calculates de depreciation expense each year from the purchase date, which means that on septemeber 1 of 2009 the company will register a depreciation expense of $4,000. But, from september 1,2008 to December 31, 2008 is less than a year we have to calculate the depreciation for each month.
Depreciation (month)= $4,000/12= $333,33
But since that depreciation would be for december 1, we need to calculate the depreciation for each day
Depreciation (day) = $333,33/31 = $10,75
From september 1 to december 1: 3 months, then $333,333 x 3= $1000
And from december 1 to december 31: 30 days, then $10,75 x 30= $322, 58
The depreciation expense on December 31 is: $1000+$322,= $1322,58 that is almost $1,333. On January 1 the depreciation expense would be $1,333.
