At the beginning of the current year, a firm purchases an asset for $60,000 and estimates that it will have a useful life of five years and a salvage value of $5,000. Under the straight-line method, the depreciation expense for the first year of the asset's useful life is:

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation by subtracting the salvage value from the purchase price and dividing by the useful life. ($60,000 - $5,000) / 5 = $11,000.

At the Beginning of the Current Year, a Firm Purchases