Using the straight-line method, depreciation for 2014 and the equipment's book value at December 31, 2014, would be:
A)$14,400 and $43,200.
B)$28,800 and $37,200.
C)$13,200 and $39,600.
D)$13,200 and $45,600.

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates depreciation by dividing the difference between the asset's cost and its salvage value by its useful life. Assuming the equipment's cost is $66,000, with a salvage value of $3,600 and a useful life of 5 years, the annual depreciation would be ($66,000 - $3,600) / 5 = $12,480. However, the closest option is $13,200, suggesting a possible error in the problem's setup or assumptions. The book value at the end of 2014 would be $66,000 - $13,200 = $52,800, but the closest option is $45,600, indicating a potential mismatch in the provided choices.

Using the Straight-Line Method, Depreciation for 2014 and the Equipment's