If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is
A)
$\begin{array} { l l l }
\text { Depreciation Expense } & 100 \
\text { Accumulated Depreciation } & & 100
\end{array}$

B)
$\begin{array} { l l l }
\text { Depreciation Expense }& 1,200 \
\text { Accumulated Depreciation }& 1,200
\end{array}$
C)
Accumulated Depreciation $\quad 1,200$
Depreciation Expense $\quad 1,200$
D)
$\begin{array}{lll}
\text { Accumulated Depreciation }& 100 \
\text { Depreciation Expense }& 100
\end{array}$

Question

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is
A)
$\begin{array} { l l l } 
\text { Depreciation Expense } & 100 \
\text { Accumulated Depreciation } & & 100
\end{array}$

B)
$\begin{array} { l l l } 
\text { Depreciation Expense }& 1,200 \
\text { Accumulated Depreciation }& 1,200
\end{array}$
C) 
Accumulated Depreciation $\quad 1,200$
Depreciation Expense $\quad 1,200$
D) 
$\begin{array}{lll}
\text { Accumulated Depreciation }& 100 \
\text { Depreciation Expense }& 100
\end{array}$

Quizplus · Accepted Answer

The straight-line depreciation expense is calculated as (Cost - Salvage Value) / Useful Life. Here, it is ($3,750 - $150) / 3 years = $1,200 per year, or $100 per month. Option A correctly shows a monthly depreciation expense of $100.

If a Fixed Asset, Such as a Computer, Were Purchased Depreciation Expense 100 Accumulated Depreciation 100\begin{array} { l l l } \text { Depreciation Expense } & 100 \\\text { Accumulated Depreciation } & & 100\end{array} Depreciation Expense Accumulated Depreciation ​100​100​

If a Fixed Asset, Such as a Computer, Were Purchased $\begin{array} { l l l } \text { Depreciation Expense } & 100 \\\text { Accumulated Depreciation } & & 100\end{array}$