Sargent Corporation bought equipment on January 1, 2018. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. The depreciation expense using the straight-line method of depreciation is

Question

Quizplus · Accepted Answer

The formula for straight-line depreciation is: (original cost - salvage value) / useful life. 
So, the depreciation expense for this equipment would be: ($360,000 - $60,000) / 6 = $50,000 per year. Therefore, the correct answer is Choice C.

Sargent Corporation Bought Equipment on January 1, 2018