Record depreciation for two months on the equipment and office furniture by Nico

Question

Record depreciation for two months on the equipment and office furniture by Nicole in the following transaction. There is no salvage value. use the straight-line method as described in the Accounting Policies section.

Nicole's transaction :Nov.1 Nicole contibutes $45,000 in cash, computer equipment and software with a current market value of 3, 024 and office furniture with a market value o 2, 016 to the Company. Nicole has originally paid 7,500 and 3,500 for the computer equipment & software and furniture, respectively. Matthew contributes 50, 040 in cash to the Company. They incorporated as Bruin Dog Company, Inc. They open a checking account at the First Namk of Northridge. Record this as one compund journal entry to the General Journal,. They each received 1,000 shares of common stock with a par value of $1.

Explanation / Answer

total purchase price : 7500+3500 = 11000; total market price = 3024+2016 =5040 ; depreciation is generally calculated for 1 year ; so depreciation for 1 year =11000-5040 = 5960 (for 12 months) for 2 months = 5960/6 = 993.33 dollars -------------->answer

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