On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours. Using straight line depreciation, calculate depreciation expense for the second year.
A) $17,500
B) $30,000
C) $12,500
D) $40,000

Question

Quizplus · Accepted Answer

Straight line depreciation is calculated by dividing the depreciable cost by the useful life. Here, $90,000 / 3 years = $30,000 per year.

On June 1, 2014, Aaron Company Purchased Equipment at a Cost