Adams Bakery uses the modified half month convention to calculate depreciation expense in the year an asset is purchased or sold Adams has a calendar year accounting period and uses the straight-line method to compute depreciation expense. On March 17, 2016, Adams acquired equipment at a cost of $200,000. The equipment has a residual value of $40,000 and an estimated useful life of 6 years. What amount of depreciation expense will be recorded for the year ending December 31, 2016? (Round your answer to the nearest dollar.)
A) $26,667
B) $22,222
C) $20,000
D) $13,333
C .Depreciation for 2017 = $200,000 - 40,000 / 6 years x 9 months / 12 months = $20,000
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