Radison Company owns a fixed asset with an original cost of $100,000.The company estimates it will use the fixed asset for 5 years,at which time the fixed asset will be sold for $5,000.The company uses straight-line depreciation.The annual depreciation expense is ________.
A) $0
B) $10,000
C) $18,000
D) $19,000

Question

Quizplus · Accepted Answer

The annual depreciation expense is calculated by subtracting the salvage value ($5,000) from the original cost ($100,000) and then dividing by the useful life (5 years). This gives ($100,000 - $5,000) / 5 = $19,000.

Radison Company Owns a Fixed Asset with an Original Cost