Question

A company buys equipment for $48,000, expects to use it for ten years, and then sell it for $6,000. Using the straight-line method, the company should report annual depreciation for the equipment of: A. $4,200. B. $8,400. C. $4,800. D. $9,600.

Answer 1

A $4,200

Step-by-step explanation:

Given the following information, a company buys equipment for $48,000 expects to use it for ten years, and then sell it for $6,000

We need to use the formula below

Annual depreciation = (Original cost - Salvage value) / Estimated life(years)

Annual depreciation = ($48,000 - $6,000) / 10

Annual depreciation = $4,200