On june 1, Scooter company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. using straight-line depreciation, calculate depreciation expense for the second year. a. $17,500b. $30,000c. $40,000d. $12,500

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Business

Darrell Padilla

24 March, 18:56

On june 1, Scooter company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. using straight-line depreciation, calculate depreciation expense for the second year. a. $17,500b. $30,000c. $40,000d. $12,500

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Answers (1)

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Brycen Wagner · Answer 1

The correct answer is b. $30,000.

Explanation:

The depreciation is systematic allocation of cost of asset over its useful life. In straight line method cost is allocated evenly during the period of asset usage. Detail calculations are given below.

Depreciation expense = Cost of asset/Useful Life

= 90,000/3

= 30,000