El Tapitio purchased restaurant furniture on September 1, 2018, for $30,000. Residual value at the end of an estimated 10-year service life is expected to be $4,500. Calculate depreciation expense for 2018 and 2019, using the straight-line method, and assuming a December 31 year-end.

Results are below.

Explanation:

Giving the following information:

Purchase price= $30,000 (September)

Salvage value= $4,500

Useful life= 10

First, we need to determine the annual depreciation using the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (30,000 - 4,500)/10

Annual depreciation= $2,550

2018:

Annual depreciation= (2,550/12)*4= $850

2019:

Annual depreciation= $2,550

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