Using straight-line depreciation with cost 50,000, salvage value 5,000, useful life 10 years, what is the annual depreciation expense?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $24.99Unlock all

Prepare for the WGU ACCT2350 Intro to Business Accounting Exam. Practice with multiple choice questions and detailed solutions to sharpen your accounting skills. Master your exam with confidence!

Multiple Choice

Using straight-line depreciation with cost 50,000, salvage value 5,000, useful life 10 years, what is the annual depreciation expense?

Explanation:
Straight-line depreciation spreads the asset’s cost minus its salvage value evenly over its useful life. So the annual depreciation expense is (cost − salvage value) / useful life. Plugging in: (50,000 − 5,000) / 10 = 45,000 / 10 = 4,500 per year. This matches the correct option. Why the other numbers don’t fit: 5,000 ignores the salvage value, 4,000 ignores salvage and uses cost divided by life, and 9,500 would involve adding salvage to cost and then dividing, which isn’t how straight-line depreciation is calculated.

Straight-line depreciation spreads the asset’s cost minus its salvage value evenly over its useful life. So the annual depreciation expense is (cost − salvage value) / useful life.

Plugging in: (50,000 − 5,000) / 10 = 45,000 / 10 = 4,500 per year. This matches the correct option.

Why the other numbers don’t fit: 5,000 ignores the salvage value, 4,000 ignores salvage and uses cost divided by life, and 9,500 would involve adding salvage to cost and then dividing, which isn’t how straight-line depreciation is calculated.

More Multiple Choice Questions
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy