Machinery is purchased for $140 000.It is estimated that it has a useful life of 5 years and a residual value of $20 000.Using the straight-line method,calculate the amount of annual depreciation to be charged.
A) $12 000
B) $24 000
C) $28 000
D) $14 000

Question

Quizplus · Accepted Answer

Annual depreciation expense = (cost of asset - expected residual value)/expected useful life = ($140 000 - $20 000)/5 = $24 000.

Machinery Is Purchased for $140 000