Straight-Line Depreciation Calculation
What is the depreciation expense for year 2 under straight-line depreciation?
a. $80000.
b. $20000.
c. $40000.
d. $44000.
Answer:
Year 2 depreciation= $16,000
Correct answer is not among the options
Explanation:
Using the straight line depreciation method we have that
Annual Depreciation = (Purchase cost - Salvage value) / useful life
= ($80,000 - $16,000) / 4
= $64,000 / 4
= $16,000
If Annual depreciation is $16,000, then the Depreciation expense for year 2 is also $16,000.