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1 January, 19:03

Kansas Enterprises purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2018 would be: $12,000.

$11,000.

$60,000.

None of these.

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Answers (1)
  1. 1 January, 20:49
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    The correct answer is B: $11,000

    Explanation:

    Giving the following information:

    January 1, 2018:

    purchase price=$60,000.

    The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years.

    Depreciation = (purchase price - residual value) / useful life

    Annual Depreciation = (60000 - 5000) / 5 = 11000

    Depreciation year 2018 = $11,000
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