Equipment was originally worth for $12000 The equipment is expected to last 5 more years and have a salvage value of $3000 what is the deprecation expense after 3 months?
The method of depreciation calculation is not defined in the question.
Assuming a linear reduction in worth
Normally depreciation is a compound type calculation and initially I started to answer using this scenario.
After reading the question again I decided that the original intention of the question poser was not this at all.
Assumption: The depreciation rate is constant per month
Total reduction in worth over 5 years
Reduction in worth per month
So for 3 months we have a reduction in value of:
The value of $450 is what the question is asking for.