Answer:
Depreciation for 2019 and the equipment's book value at December 31, 2019, would be: $13,200 and $45,600 respectively
Explanation:
Cutter Enterprises uses straight-line depreciation method, Depreciation Expense per year is calculated by following formula:
Annual Depreciation Expense = (Cost of the equipment − Residual Value)/Useful Life = ($72,000 - $6,000)/5 = $13,200
Depreciation Expense for 2018 = $13,200
Accumulated depreciation at December 31, 2018 = $13,200
Depreciation Expense for 2019 = $13,200
Accumulated depreciation at December 31, 2019 = $13,200 + $13,200 = $26,400
The equipment's book value at December 31, 2019 = Cost of the equipment - Accumulated depreciation at December 31, 2019 = $72,000 - $26,400 = $45,600
