the reed company uses the straight-line method to depreciate its equipment. On may 1, 2007, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Reed record for the equipment in the adjusting entry on December 31, 2007?
I NEED HELP WITH THE EXPANATION OF THE ANSWER THANKS
a.$6,000
b.$12,000
c.$13,500
d.$18,000
depreciation expense should Reed record for the equipment in the adjusting entry on December 31, 2007=cost-salvage/life*months used/12
=$200,000-$20,000/10*8/12
=$12,000
Here months used is 8 months/12 months of total used for depreciation
So the option is B.
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