Question

Question 11 1 pt Ariel Tax Planning Service has the following plant assets: Communications equipment: Cost, $8,640 with useful life of 8 years; Furniture: Cost, $18,000 with useful life of 12 years; and Computer: Cost, $13,440 with useful life of 4 years. Assume the residual value of all the assets is zero and the straight-line method is used. Ariel's monthly depreciation journal entry will include a credit to Accumulated Depreciation of $495 o credit to Depreciation Expense of $5,940 debit to Accumulated Depreciation of $495 debit to Depreciation Expense of $5,940

Answer 1

A. credit to accumulated depreciation of $495.

working:

annual depreciation = (cost - salvage value) / life in years.

asset	annual depreciation	monthly depreciation
communication equipment	(8640-0)/8 years =>$1,080	$1080/12 months =>$90
furniture	(18,000-0)/12 =>$1,500	$1500/12 months=>$125
computer	(13,440-0)/4=>$3,360	$3,360/12 months =>$280
	total	$495.

the monthly journal entry will be:

depreciation expense a/c......dr....$495.

..........To accumulated depreciation a/c.......$495..