MacGyver Company bought equipment on January 3, 2013, for $34,000. At the time of purchase, the equipment was estimated to have a useful life of six years and a salvage value of $880. Using the straight-line method, the amount of one year's depreciation is

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation by subtracting the salvage value from the cost and dividing by the useful life. ($34,000 - $880) / 6 = $5,520.

MacGyver Company Bought Equipment on January 3, 2013, for $34,000