Question

Sargent Corporation bought equipment on January 1, 2015. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. The annual depreciation expense using the straight-line method of depreciation is Group of answer choices $50,000. $72,000. $70,000. None of these answer choices are correct.

Answer 1

The correct answer is A.

Step-by-step explanation:

Giving the following information:

Sargent Corporation bought equipment on January 1, 2015. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years.

Under the straight-line method of depreciation, we need to use the following formula:

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

Annual depreciation= (360,000 - 60,000)/6= $50,000