Ronnie's Wings acquired equipment on January 1, 2019, for $300,000. The equipment had an estimated useful life of 10 years and an estimated salvage value of $25,000. On January 1, 2022, Ronnie's Wings revised the total useful life of the equipment to 12 years. Compute amortization expense for the year ended December 31, 2022, if Ronnie's Wings uses straight-line amortization.

Question

Quizplus · Accepted Answer

The correct answer is A.The amortization expense for the year ended December 31, 2022, is $21,389. This is calculated as follows:Amortization expense = (Cost of equipment - Salvage value) / Useful life= ($300,000 - $25,000) / 12= $275,000 / 12= $21,389

Ronnie's Wings Acquired Equipment on January 1, 2019, for $300,000