A company purchased new computers at a cost of $14,000 on September 30. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the first year ended December 31? Group of answer choices $875 $250 $1,000 $750
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
A company purchased new computers at a cost of $14,000 on September 30. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of
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