A machine that was purchased on January 1 for $45,000 has an estimated salvage value of $9,000. If the machine's depreciation rate is 20%, its annual depreciation is
A) $9,000.
B) $36,000.
C) $7,200.
D) $10,800.

Question

Quizplus · Accepted Answer

The annual depreciation is calculated by multiplying the depreciation rate (20%) by the cost of the machine minus the salvage value: 20% * ($45,000 - $9,000) = $7,200.

A Machine That Was Purchased on January 1 for $45,000