A machine was purchased for $54,000 and it was estimated to have a $9,000 salvage value at the end of its useful life. Monthly depreciation expense of $750 was recorded using the straight-line method. The annual depreciation rate is
A) 25%.
B) 2%.
C) 16%.
D) 20%.

Question

Quizplus · Accepted Answer

The annual depreciation expense is $750 * 12 = $9,000. The depreciable amount is $54,000 - $9,000 = $45,000. The annual depreciation rate is $9,000 / $45,000 = 20%.

A Machine Was Purchased for $54,000 and It Was Estimated