On April 1, 2012, Bear Ltd.purchased equipment for $80,000.The equipment was estimated to have a residual value of $10,000 and is being depreciated over eight years using the straight-line method.What should be the depreciation expense for this equipment for the year ended December 31, 2017?

Question

Quizplus · Accepted Answer

The depreciable cost of the equipment can be calculated as follows: 
Cost of equipment - Residual value = $80,000 - $10,000 = $70,000

The annual depreciation expense can be calculated as: 
Depreciable Cost / Useful life = $70,000 / 8 = $8,750

Therefore, the depreciation expense for the year ended December 31, 2017, would be $8,750. Therefore, the answer is C.