Mountain Products has decided to raise $6 million via a rights offering. The company will issue one right for each share of stoc
1 answer:
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Answer:
annual depreciation expense = $6000
so correct option is d. $6,000
Explanation:
given data
machine costing = $40,000
transportation and installation = $1,000
useful life = 6 years
residual value = $5,000
to find out
How much is the annual depreciation expense
solution
we get here first Cost of machine that is
Cost = $40,000 + $1000
cost = $41000
so depreciable base will be here
Depreciable base = cost - residual value
Depreciable base = 41000 - 5000
Depreciable base = $36,000
so annual depreciation expense is
annual depreciation expense =
annual depreciation expense = $6000
so correct option is d. $6,000