A forklift had a purchase price of $10,000,delivery costs of $2,000,a physical life of 6 years and a useful life of 4 years.Estimated residual value is zero.The annual depreciation charge using the straight-line method is:
A) $1,667.
B) $3,000.
C) $2,500.
D) $2,000.

Question

Quizplus · Accepted Answer

The annual depreciation charge using the straight-line method is calculated by subtracting the estimated residual value from the total cost (purchase price + delivery costs) and then dividing by the useful life. Here, total cost = $10,000 + $2,000 = $12,000. With a useful life of 4 years and an estimated residual value of $0, the annual depreciation charge = $12,000 / 4 = $3,000.

A Forklift Had a Purchase Price of $10,000,delivery Costs of $2,000,a