On October 1, 2014, Mann Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 salvage value at the end of its useful life. What is the depreciation expense for 2014 if Mann Company uses the straight-line method of depreciation? a. $3,000. b. $16,000. c. $4,000. d. $8,000.

Question

Business

Cohen Mata

1 September, 22:23

On October 1, 2014, Mann Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 salvage value at the end of its useful life. What is the depreciation expense for 2014 if Mann Company uses the straight-line method of depreciation? a. $3,000. b. $16,000. c. $4,000. d. $8,000.

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Answers (1)

Know the Answer?

Meredith Clay · Answer 1

The correct answer is A.

Explanation:

Giving the following information:

On October 1, 2014, Mann Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 salvage value at the end of its useful life.

Annual depreciation = (original cost - salvage value) / estimated life (years)

Annual depreciation = 60,000/5=12,000

3 months depreciation = 12,000/12*3 = 3,000