MacGyver Company bought equipment on January 3,2016,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
A) $880.
B) $5,520.
C) $460.
D) $5,667.

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 3,2016,for $34,000