Pearson Company bought a machine on January 1, 2014. The machine cost $144,000 and had an expected salvage value of $24,000. The life of the machine was estimated to be 5 years. The depreciable cost of the machine is
A) $144,000.
B) $120,000.
C) $40,000.
D) $24,000.

Question

Quizplus · Accepted Answer

The depreciable cost is calculated by subtracting the salvage value from the cost of the machine: $144,000 - $24,000 = $120,000.

Pearson Company Bought a Machine on January 1, 2014