Use the following to answer questions 11-13 The Cardinals purchased new equipmen

Question

Use the following to answer questions 11-13 The Cardinals purchased new equipment at a cost of $200,000 on April 1 2016. The expected useful life is 10 years and the asset is expected to have salvage value of $20.000. The Cardinals depreciate its assets using the straight line method. What is the club's depreciation expense for the year ended December 31. 2016? (Round to the nearest dollar) 18,000 D Question 12 2 pts Use the following to answer questions 11-13 The Cardinals purchased new equipment at a cost of $200000 on April li. 2016. The expected useful life is 10 years and the asset s expected to have salvage value of $20.000. The Cardinals depreciate its assets using the straight line method. What is the ciub's accumulated depreciation for the year ended December 31 29279 (Round to the nearest dollar) 15

Explanation / Answer

11) Depreciation under straight line method = (Cost of asset - salvage value)/useful life Purchase date = April 1, 2016 Number of months related to 2016 = 9 months (apr to dec) Depreciation for the year ended Dec 31, 2016 = (200000-20000)/10*9/12 = $13500 12) Depreciation under straight line method = (Cost of asset - salvage value)/useful life Purchase date = April 1, 2016 Number of months related to 2016 = 9 months (apr to dec) Depreciation per annum = (200000-20000)/10*9/12 = $13500 Accumulated Depreciation for the year ended Dec 31, 2017 = $13500+(200000-20000)/10 = $13500+$18000 = $31500

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