A company purchased a plant asset for $60,000. The asset has an estimated salvage value of
$4,000, and an estimated useful life of 7 years. The annual depreciation expense using the straight-line method is $4,000 per year.

Question

Quizplus · Accepted Answer

The annual depreciation expense using the straight-line method is calculated as (Cost - Salvage Value) / Useful Life, which is ($60,000 - $4,000) / 7 = $8,000 per year.

A Company Purchased a Plant Asset for $60,000