# On May 10, 2007, the Horan Company purchased equipment for \$25,000. The equipment has an estimated service life of five years and zero residual value. Assume that straight-line depreciation is used. Required Compute the depreciation for 2007 for each of

On May 10, 2007, the Horan Company purchased equipment for \$25,000. The equipment has an estimated service life of five years and zero residual value. Assume that straight-line depreciation is used.

Required

Compute the depreciation for 2007 for each of the following four alternatives:

1. The company computes depreciation to the nearest day. (Use 12 months of 30 days each.)

2. The company computes depreciation to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month.

3. The company computes depreciation to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year.

4. The company records one-half year’s depreciation on all assets purchased during the year.

## This problem has been solved!

Do you need an answer to a question different from the above? Ask your question!
Related Book For

## Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

Question Details
Chapter # 11
Section: Exercises
Problem: 10
Posted Date: March 12, 2012 03:37:00