Answer:
Depreciation expense= $36,875
Explanation:
Under the straight line method of depreciation, the cost of an asset less the salvage value is spread equally over the expected useful life.
<em>An equal amount is charged as annual depreciation over the life of the asset. The annual depreciation is calculated as follows:</em>
Annual depreciation:
= (cost of assets - salvage value)/ Estimated useful life
Cost - 220,000
Residual value = 43,000
Estimated useful life = 4 years
Annual depreciation = (220,000- 43,000)/4 =44,250
Annual depreciation = 44,250.
<em>Under the half-month convention, a full month depreciation is charged where an asset is first put to at the middle month of the month. </em>
<em>Thus March 17, 2018 to December 2018 is taken to be 10 full months</em>
Depreciation expense = 44,250.× 10/12 = 36,875
Depreciation expense= $36,875
