On October 1, 2021, Bonita Company places a new asset into service. The cost of the asset is $129000 with an estimated 5-year life and $31000 salvage value at the end of its useful life. What is the depreciation expense for 2021 if Bonita Company uses the straight- line method of depreciation? O $4900 O $25800 O $12900 O $6450

On October 1, 2021, Bonita Company places a new asset into service. The cost of the asset is $129000 with an estimated 5-year life and $31000 salvage value at the end of its useful life. What is the depreciation expense for 2021 if Bonita Company uses the straight- line method of depreciation? O $4900 O $25800 O $12900 O $6450

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Description: On October 1, 2021, Bonita Company places a new asset into service. The cost of the asset is $129000 with an estimated 5-year lifeand $31000 salvage value at the end of its useful life. What is the depreciation expense for 2021 if Bonita Company use

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

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Question

On October 1, 2021, Bonita Company places a new asset into service. The cost of the asset is $129000 with an estimated 5-year life
and $31000 salvage value at the end of its useful life. What is the depreciation expense for 2021 if Bonita Company uses the straight-
line method of depreciation?
O $4900
O $25800
O $12900
O $6450

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