Bronze Company purchased a furnace for $10,000. The life of the furnace is estimated to be 5 years, and its trade-in value at the end of 5 years is $4,000. The yearly depreciation for the furnace is _____.
A) $1,200
B) $3,100
C) $900
D) $2,250

Question

Quizplus · Accepted Answer

The yearly depreciation is calculated using the straight-line method: (Cost - Trade-in value) / Useful life = ($10,000 - $4,000) / 5 = $1,200.

Bronze Company Purchased a Furnace for $10,000