Avalon Industries buys equipment for $24,000,expects to use it for ten years,and then sell it for $3,000.Using the straight-line method,the company should report annual depreciation for the equipment of:
A)$2,100.
B)$4,200.
C)$2,400.
D)$4,800.

Question

Quizplus · Accepted Answer

Depreciation expense per year = (Cost − Residual value)× (1 ÷ Useful life)
= ($24,000 − $3,000)× 1 / 10 = $2,100

Avalon Industries Buys Equipment for $24,000,expects to Use It for Ten