A company buys equipment for $48,000 and expects to use it for ten years and then sell it for $6,000.Using the straight-line method,the company should report depreciation for the equipment of:
A)$4,200 per year.
B)$8,400 per year.
C)$4,800 per year.
D)$9,600 per year.

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. ($48,000 - $6,000) / 10 = $4,200 per year.

A Company Buys Equipment for $48,000 and Expects to Use