Chapter 4, Problem 4.36MCE

Depreciation Expense

During 2016, Carter Company acquired three assets with the following costs, estimated useful lives, and estimated salvage values:

The company uses the straight-line method to depreciate all assets and computes depreciation to the nearest month. For example, the computer system will be depreciated for six months in 2016.

Required

1. Compute the depreciation expense that Carter will record on each of the three assets for 2016.
2. Comment on the following statement: Accountants could save time and money by simply expensing the cost of long-term assets when they are purchased. In addition, this would be more accurate because depreciation requires estimates of useful life and salvage value.