Sargent Corporation bought equipment on January 1, 2011.The equipment cost €180,000 and had an expected residual value of €30,000.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 depreciation expense using the straight-line method is calculated by dividing the cost of the asset minus the residual value by the estimated life of the asset. 
(€180,000 - €30,000) / 6 years = €25,000 per year. Therefore, the answer is (C) €25,000.

Sargent Corporation Bought Equipment on January 1, 2011