On January 1,a machine with a useful life of five years and a residual value of $6,000 is purchased for $30,000.What is the depreciation expense in year 3 under straight-line depreciation?
A) $6,000
B) $4,800
C) $14,400
D) $18,000

Question

Quizplus · Accepted Answer

The formula for straight-line depreciation is:

Depreciation Expense = (Cost - Residual Value) / Useful Life

In this case, the cost is $30,000, the residual value is $6,000, and the useful life is 5 years. So, the annual depreciation expense would be:

Depreciation Expense = ($30,000 - $6,000) / 5 years = $4,800 per year

To calculate the depreciation expense in year 3, we simply multiply the annual depreciation expense by the number of years:

Depreciation Expense in Year 3 = $4,800 x 3 = $14,400

Therefore, the correct choice is B) $4,800.

On January 1,a Machine with a Useful Life of Five