During 2010, Sayer Co.sold equipment that had cost $206,000 for $127,600.This resulted in a gain of $9,600.The balance in Accumulated depreciation-Equipment was $660,000 on January 1, 2010, and $630,000 on December 31.No other equipment was
Disposed of during 2010.Depreciation expense for 2010 was

Question

Quizplus · Accepted Answer

The gain on the sale of equipment is irrelevant to calculating the depreciation expense for 2010. 
Depreciation expense is calculated by taking the beginning balance in Accumulated depreciation and subtracting the ending balance, then dividing that amount by the useful life of the equipment. 
In this case, the beginning balance was $660,000 and the ending balance was $630,000, so the depreciation expense for the year was ($660,000 - $630,000) / useful life. We are not given the useful life of the equipment, but we are given the cost of the equipment, which we can use to calculate the annual depreciation expense. 
Using the formula for straight-line depreciation, we can calculate the annual depreciation expense as: 
Annual depreciation expense = Cost / Useful life 
Cost = $206,000 
Solving for useful life: 
Useful life = Cost / Annual depreciation expense 
Useful life = $206,000 / Annual depreciation expense 
We don't know the annual depreciation expense, but we do know that the beginning and ending balances in Accumulated depreciation were $660,000 and $630,000, respectively. So we can calculate the depreciation expense for the year as: 
Depreciation expense = Beginning balance - Ending balance 
Depreciation expense = $660,000 - $630,000 
Depreciation expense = $30,000 
Now we can use this depreciation expense to solve for the useful life: 
Useful life = Cost / Annual depreciation expense 
Useful life = $206,000 / $30,000 
Useful life = 6.87 years 
Therefore, the annual depreciation expense is: 
Annual depreciation expense = Cost / Useful life 
Annual depreciation expense = $206,000 / 6.87 
Annual depreciation expense = $30,000 (rounded) 
So the correct answer is B) $58,000.