When Hector moved into his newly leased space, he purchased office furniture and hung art, all of
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Question:
When Hector moved into his newly leased space, he purchased office furniture and hung art, all of which cost him $5,000. He estimated the furniture and art would have a 5-year useful life before he would want to replace with new furniture and art. He was struggling because although the useful lives were 5 years, his lease was only for 1 year: over what time period should he depreciate his office furniture?
- Discuss the options you see for Hector to depreciate his assets. Will these options impact his monthly income and operating cash flows? Over what period would you depreciate the assets?
- Using the BSE format, record the depreciation expense for the first month Hector is using the assets.
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