A machine with a useful life of 10 years and a residual value of $4,000 was purchased for $30,000.What is annual depreciation under the straight-line method?
A)$3,000
B)$3,400
C)$2,600
D)$5,200

Question

Quizplus · Accepted Answer

Annual depreciation under the straight-line method is calculated as follows:

Depreciation per year = (Purchase price - Residual value) / Useful life

Depreciation per year = ($30,000 - $4,000) / 10

Depreciation per year = $2,600

Therefore, the annual depreciation under the straight-line method is $2,600, which is option C.

A Machine with a Useful Life of 10 Years and a Residual