A machine was purchased for $54,000 and it was estimated to have a $9,000 salvage value at the end of its useful life.Monthly depreciation expense of $600 was recorded using the straight-line method.The annual depreciation rate is
A)20%.
B)1.6%.
C)12.8%.
D)16.0%.

Question

Quizplus · Accepted Answer

The annual depreciation expense is $600 * 12 = $7,200. The depreciable amount is $54,000 - $9,000 = $45,000. The annual depreciation rate is ($7,200 / $45,000) * 100% = 16.0%.

A Machine Was Purchased for $54,000 and It Was Estimated