Mitchell Corporation bought equipment on January 1, 2014. The equipment cost $180,000 and had an expected salvage value of $30,000. The life of the equipment was estimated to be 6 years. The depreciation expense using the straight-line method of depreciation is
A) $35,000.
B) $36,000.
C) $25,000.
D) none of these answer choices are correct.

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation by subtracting the salvage value from the cost and dividing by the useful life: ($180,000 - $30,000) / 6 = $25,000.

Mitchell Corporation Bought Equipment on January 1, 2014