Answer :
The monthly depreciation expense on the asset is $250.
What is depreciation expense?
A constant asset's of that share which has been deemed to be consumed in the present is subject to depreciation expense. A long-term asset should be capitalized when purchased rather than expensed during the accounting period in which it is made.
Expensing an asset right away would overestimate the expense in that period and understate it in all subsequent periods, assuming the asset is economically valuable and generates returns beyond that first accounting period. Depreciation is used to better match the expense of a long-term asset to the time periods it provides benefits or to the revenue it generates in order to prevent doing so.
There are three common ways to calculate depreciation that include straight line depreciation, balance declining type and the units of production.
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