A firm purchases an asset for $50,000 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. Here, ($50,000 - $5,000) / 5 = $9,000.

A Firm Purchases an Asset for $50,000 and Estimates That