Answer:
Depreciation till December 31, Year 1 will be equal to 1,250$
Step-by-step explanation:
Purchasing Cost = 28,000$
Salvage Value = 3,000$
Total Depreciation:
Total Depreciation over 5 years (60 Months) = Purchasing Cost - Salvage Value
Total Depreciation over 5 years (60 Months) = 28,000 - 3,000
Total Depreciation over 5 years (60 Months) = 25,000$
Monthly Depreciation:
Using the unity method we have monthly depreciation by dividing the total depreciation by the total no. of months as below:
Total Depreciation over a single month =25,000/60
Total Depreciation over a single month = 416.67$ (Monthly Depreciation)
Depreciation till December 31, Year 1
As from September 1, Year 1 to December 31, Year 1, its been 3 months therefore total depreciation will be = 3 * Monthly Depreciation
Depreciation till December 31, Year 1 = 3 * 416.67
Depreciation till December 31, Year 1 = 1,250$
