On November 1, 2021, Lovett Company places a new asset into service.The cost of the asset is $90,000 with an estimated 5-year life and $10,000 salvage value at the end of its useful life.What is the depreciation expense for 2022 if Lovett Company uses the straight-line method of depreciation?
A)$4,000
B)$16,000
C)$2,667
D)$9,000

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates depreciation by subtracting the salvage value from the cost and dividing by the useful life. For Lovett Company: ($90,000 - $10,000) / 5 = $16,000 per year.

On November 1, 2021, Lovett Company Places a New Asset