On January 1, a machine with a useful life of five years and a residual value of $15,000 was purchased for $75,000. What is the depreciation expense for year 2 under straight-line depreciation?
A) $15,000.
B) $45,000.
C) $12,000.
D) $36,000.

Question

Quizplus · Accepted Answer

Under straight-line depreciation, the annual depreciation expense is calculated by subtracting the residual value from the cost and then dividing by the useful life. ($75,000 - $15,000) / 5 = $12,000 per year.

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