Partial Period Depreciation

On May 10, 2016, Horan Company purchased equipment for $25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used.

Required:

Compute the depreciation expense for 2016 for each of the following four alternatives:

Horan computes depreciation expense to the nearest day. Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places. $

Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. Round the monthly depreciation rate to 2 decimal places and round your final answer to the nearest dollar. $

Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. $

Horan records one-half years depreciation expense on all assets purchased during the year. $