The fixed assets have estimated useful lives as follows: Building - 31.5 years C

Question

The fixed assets have estimated useful lives as follows: Building - 31.5 years Computer Equipment - 5.0 years Office Equipment - 7.0 years Use the straight-line method of depreciation. Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building’s scrap value is $7,500. The office equipment has a scrap value of $350. The computer equipment has no scrap value. Calculate the depreciation for one month. The fixed assets have estimated useful lives as follows: Building - 31.5 years Computer Equipment - 5.0 years Office Equipment - 7.0 years Use the straight-line method of depreciation. Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building’s scrap value is $7,500. The office equipment has a scrap value of $350. The computer equipment has no scrap value. Calculate the depreciation for one month.

Explanation / Answer

Solution:

(1). Caluculaton of Depreciation Use the Stright-Line Depreciation Method:

(A). Buildings:

Depreciation = 0 - 7,500 / 31.5 Years

= 238.09

(B). Computer Equipment:

  Depreciation = 0 - 350 / 5 Years

= 70

(C). Office Equipment:

Depreciation = 0 - 0 / 7Years

= 0

Depreciation = Asset Value - Solvage Value / Estimated Life Time of Asset

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