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On January 1, 2022, Anvil Corp.purchased equipment for $60,000.It was expected to last 5 years, after which it will be sold for $5,000.It is expected to be used for a total of 10,000 machine hours, and was used for 750 hours during the year ended December 31, 2022.
-The depreciation expense for 2022 using the straight-line method will be
A)$4,125.
B)$11,000.
C)$12,000.
D)$12,250.

Question

Use the following information for questions 
On January 1, 2022, Anvil Corp.purchased equipment for $60,000.It was expected to last 5 years, after which it will be sold for $5,000.It is expected to be used for a total of 10,000 machine hours, and was used for 750 hours during the year ended December 31, 2022.
-The depreciation expense for 2022 using the straight-line method will be
A)$4,125.
B)$11,000.
C)$12,000.
D)$12,250.

Quizplus · Accepted Answer

The straight-line depreciation expense is calculated by subtracting the salvage value from the cost and then dividing by the useful life. Here, ($60,000 - $5,000) / 5 = $11,000 per year.

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