Equipment was originally worth for $12000
The equipment is expected to last 5 more years and have a salvage value of $3000
what is the deprecation expense after 3 months?

Question

Equipment was originally worth for $12000 
The equipment is expected to last 5 more years and have a salvage value of $3000
what is the deprecation expense after 3 months?

Genesis Allen · Accepted Answer

The method of depreciation calculation is not defined in the question.

Assuming a linear reduction in worth #->$450# Initially, I began to respond using this scenario because depreciation is typically calculated using a compound method. I concluded that this was not at all the question poser's original intention after reading the question again. The monthly depreciation rate is assumed to be constant. Total reduction in worth over 5 years #->$12000-$3000=$9000 # Reduction in worth per month #->($9000)/(5xx12) =$150# Thus, we have a decrease in value of: for the next three months. #$12000-(3xx$150) = $12000-$450# The value of $450 is what the question is asking for.

Equipment was originally worth for $12000 The equipment is expected to last 5 more years and have a salvage value of $3000 what is the deprecation expense after 3 months?