The capital expenditures budget shows that Valley must purchase $50,000 of equipment on January 1 to establish the new center. Valley will pay for the equipment on January 31. The equipment is expected to have a 8-year useful life and a $2,000 salvage value and will depreciate on a straight-line basis. Make sure to calculate depreciation ON A MONTHLY BASIS. Prepare a selling and administrative expense budget.

Question

The capital expenditures budget shows that Valley must purchase $50,000 of equipment on January 1 to establish the new center.  Valley will pay for the equipment on January 31.  The equipment is expected to have a 8-year useful life and a $2,000 salvage value and will depreciate on a straight-line basis.  Make sure to calculate depreciation ON A MONTHLY BASIS. Prepare a selling and administrative expense budget.