Question

A company purchased a computer system on March 1. Its cost was $55,000 and it had an estimated salvage value of $10,000. It was expected to have a useful life of 5 years. To the nearest dollar, the depreciation for year 2 using straight-line depreciation will be: (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

A. $11,000.

B. $6,750.

C. $9,000.

D. $7,500.

Answer 1

To calculate the depreciation for year 2 using straight-line depreciation, divide the difference between the cost and salvage value by the useful life.

Step-by-step explanation:

To calculate the depreciation for year 2 using straight-line depreciation, you need to divide the difference between the cost of the computer system and its salvage value by the useful life in years.

The difference between the cost and salvage value is $55,000 - $10,000 = $45,000.

The depreciation for year 2 would be $45,000 / 5 = $9,000.

Therefore, the correct answer is C. $9,000.