On October 1, 2017, Mann Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the depreciation expense for 2017 if Mann Company uses the straight-line method of depreciation?
A)$4,500.
B)$24,000.
C)$6,000.
D)$12,000.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost of asset - Salvage value) / Useful life= ($120,000 - $30,000) / 5= $90,000 / 5= $18,000 per yearSince the asset was placed in service on October 1, 2017, depreciation expense for 2017 is 3/12 of $18,000 = $4,500.

On October 1, 2017, Mann Company Places a New Asset