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 depreciation expense using the straight-line method of depreciation is
A) $40,000.
B) $28,800.
C) $24,000.
D) none of these answer choices are correct.

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation by subtracting the salvage value from the cost and dividing by the useful life: ($144,000 - $24,000) / 5 = $24,000.

Pearson Company Bought a Machine on January 1, 2014