Mohr Company purchases a machine at the beginning of the year at a cost of $24,000.The machine is depreciated using the straight-line method.The machine's useful life is estimated to be 5 years with a $4,000 salvage value.Depreciation expense in year 2 is:
A)$4,800.
B)$4,000.
C)$9,600.
D)$20,000.
E)$0.

Question

Quizplus · Accepted Answer

Depreciation expense is calculated by subtracting the salvage value from the cost and then dividing by the useful life. ($24,000 - $4,000) / 5 = $4,000 per year.

Mohr Company Purchases a Machine at the Beginning of the Year