A machine was purchased for $68,000.It has a useful life of 5 years and a residual value of $8,000.Determine the annual depreciation expense using the straight-line method?
A) $20,000
B) $12,000
C) $60,000
D) $16,000

Question

Quizplus · Accepted Answer

Annual depreciation expense using straight-line method = (Cost - Residual value) / Useful life
= ($68,000 - $8,000) / 5 years
= $12,000 per year. 
Therefore, the correct answer is option B.

A Machine Was Purchased for $68,000