Answer:
Depreciation expense= $1,416.67
Explanation:
Giving the following information:
Purchasing price= $38,000
Residual value= $4,000
Useful life is 8 years.
First, we need to calculate the annual depreciation. We will use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (38,000 - 4,000) / 8= $4,250
Now, the depreciation for 4 months.
Depreciation expense= (4,250/12)*4= $1,416.67
