The life of an oven is 15 years. The original cost of the oven was $2,500 and the salvage value was $800. What is the depreciation amount?

Question

Quizplus · Accepted Answer

First, we need to calculate the depreciation amount per year: 
Depreciation amount = (original cost - salvage value) / life span 
Depreciation amount = ($2,500 - $800) / 15 years 
Depreciation amount = $100 / year 
To find the total depreciation amount over 15 years: 
Total depreciation = depreciation amount x total years 
Total depreciation = $100/year x 15 years 
Total depreciation = $1,500 
Therefore, the answer is B ($1,700 - $200 = $1,500).

The Life of an Oven Is 15 Years