Equipment with a cost of $130,000 has an estimated residual value of $10,000 and an estimated life of 5 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?
A) $24,000
B) $32,500
C) $33,000
D) $35,750

Question

Quizplus · Accepted Answer

The straight-line method of depreciation is calculated by subtracting the residual value from the cost and then dividing by the useful life in years. ($130,000 - $10,000) / 5 = $24,000 per year.

Equipment with a Cost of $130,000 Has an Estimated Residual