A piece of equipment cost $1,000 and has a salvage value of $200.If it has an 8-year life,the annual depreciation expense under straight-line depreciation would be:
A)$125.
B)$100.
C)$200.
D)$800.

Question

Quizplus · Accepted Answer

The depreciable cost is the original cost minus salvage value, which is $1,000 - $200 = $800. Depreciation expense per year under straight-line depreciation is depreciable cost divided by the useful life, which is $800 / 8 = $100. Therefore, the correct answer is option B.

A Piece of Equipment Cost $1,000 and Has a Salvage