On January 1,Weldon Weston Co.purchased equipment for $250,000.It has an estimated useful life of five years and its residual value is $25,000.The company has a calendar year-end.Using the straight-line method,depreciation expense for the first year of its life equals:
A)$45,000.
B)$50,000.
C)$90,000.
D)$100,000.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost − Residual value)× (1 ÷ Useful life)
= ($250,000 − $25,000)× (1 ÷ 5)= $45,000