Piston Company owns a fixed asset with an original cost of $100,000. Piston Company estimates it will use the asset for 4 years, at which time the asset can be sold for $10,000. The annual depreciation expense is:
A) $- 0-
B) $22,500
C) $25,000
D) $10,000

Question

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value) / Useful life= ($100,000 - $10,000) / 4= $22,500

Piston Company Owns a Fixed Asset with an Original Cost