Respuesta :
Answer:
$3150
Explanation:
Given:
Cost of the asset purchased = $87500 (on 1st October. 2022)
Salvage value at the end of its useful life = $24500
Useful life estimated = 5 years
Question asked:
What is the depreciation expense for 2022 if Ivanhoe Company uses the straight-line method of depreciation?
Solution:
As we know:
[tex]Straight-Line\ Depreciation\ Expense=\frac{Cost\ - Salvage\ Value}{Useful\ Life\ of\ the\ Asset}[/tex]
[tex]=\frac{87500-24500}{5} =\frac{63000}{5} =12600[/tex]
Depreciation expenses per year = $12600
But we have to find depreciation expenses for 2022 for:-
From 1st October, 2022 to 31st December, 2022 = 3 months.
Straight-Line Depreciation Expense for Partial Year =
[tex]D\times\frac{N}{12} \\\\ D=Depreciation\ expense\ for\ a\ complete\ year.\\N= Number\ of\ months\ during\ which\ the\ fixed\ asset\ was\ available\ for\ use[/tex]
Depreciation Expense for 3 months = [tex]12600\times\frac{3}{12} =\frac{37800}{12} =3150[/tex]
Therefore, the depreciation expense for 2022 if Ivanhoe Company uses the straight-line method of depreciation is $3150.
