Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation

Question

3 years ago

14

Equipment was purchased for $60,000. Freight charges amounted to $2,800 and there was a cost of $8,000 for building a foundation

and installing the equipment. It is estimated that the equipment will have a $12,000 salvage value at the end of its 5-year useful life. Depreciation expense each year using the straight-line method will be
a. $11,760.
b. $9,600.
c. $9,840.
d. $14,160.

Business

1 answer:

Sholpan [36] · Answer 1 · 2021-12-14T08:30:32+03:00

Sholpan [36]3 years ago

6 0

Answer:

a. $11,760.

Explanation:

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

Cost of asset = $60,000 + $8,000 + $2,800 = $70,800

($78,800 - $12,000) / 5 = $11,760.

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