A building was purchased on August 1 for $490,000. It has a salvage value of $38,000 and a useful life of 30 years. To the nearest dollar, how much will the depreciation expense for the building be for the first year ended December 31, using the straight-line method? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A)$15,067
B)$16,333
C)$6,278
D)$6,805

Question

Quizplus · Accepted Answer

The straight-line method of depreciation evenly depreciates the asset over its useful life. 
To calculate the annual depreciation expense for the building, we need to first calculate the depreciable cost:

Depreciable cost = cost of asset - salvage value
= $490,000 - $38,000
= $452,000

Annual depreciation expense = depreciable cost / useful life
= $452,000 / 30
= $15,066.67

Rounding this to the nearest dollar, we get $15,067, which is option C.

A Building Was Purchased on August 1 for $490,000