Downs Tax Planning Service bought communications equipment f

Downs Tax Planning Service bought communications equipment for $9,600 on January 1, 2017. It has an estimated useful life of five years and zero residual value

Downs uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2017, the balance in the Accumulated Depreciation account for this equipment is ________.
A) $160
B) $1,920
C) $800
D) $960

ANSWER

D .Straight-line depreciation = (Cost – Residual value) / Useful life
Straight-line depreciation = ($9,600 — 0 ) / 5 years = $1,920 per year