DeLito Tax Planning Service bought production equipment for $10,200 on January 1, 2017. It has an estimated useful life of five years and zero residual value
DeLito uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2017, the book value of this equipment shown on its balance sheet will be ________.
A) $9,180
B) $10,200
C) $11,220
D) $10,370
A .Straight-line depreciation = (Cost - Residual value) / Useful life
Straight-line depreciation = ($10,200 — 0 ) / 5 years = $2,040 per year
Book value of equipment = $10,200 - $1,020 = $9,180
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