Question

Culver Corporation bought equipment on January 1, 2017. The equipment cost $460000 and had an expected salvage value of $45000. The life of the equipment was estimated to be 6 years. The depreciation expense using the straight-line method of depreciation is:_____.a. $84167.
b. $92000.
c. $69167.
d. none of these.

Answer 1

Answer:

Annual depreciation= $69,166.67

Explanation:

Giving the following information:

Purchase price= $460,000

Salvage value= $45,000

Useful life= 6 years

To calculate the depreciation expense, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (460,000 - 45,000) / 6

Annual depreciation= $69,166.67