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.

Question

Business

Kiera Warren

24 October, 02:12

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.

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Answers (1)

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Tiara Kramer · Answer 1

The correct answer is A.

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