Hamilton Tool and Die Company purchased $72,000 of equipment with an estimated service life of 4 years. The equipment will be worth $4,000 at the end of its life. The annual amount of depreciation on this equipment is:

Question

Quizplus · Accepted Answer

The annual depreciation is calculated using the straight-line method: (Cost - Salvage Value) / Useful Life = ($72,000 - $4,000) / 4 = $17,000.

Hamilton Tool and Die Company Purchased $72,000 of Equipment with an Estimated