Computer equipment was acquired at the beginning of the year at a cost of $57,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. Determine the 2nd year's depreciation using straight-line depreciation.
A) $13,200
B) $19,200
C) $ 9,600
D) $ 9,000

Question

Quizplus · Accepted Answer

Straight-line depreciation is calculated by dividing the difference between the cost and salvage value of the asset over its useful life.

Depreciation per year = (Cost - Salvage Value) / Useful Life

In this case, the depreciation per year is: 
= ($57,000 - $9,000) / 5 
= $9,600

Therefore, the 2nd year's depreciation is still $9,600 since it is a straight-line depreciation and the same amount is depreciated each year.

Computer Equipment Was Acquired at the Beginning of the Year