Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years.
Using the straight-line method, depreciation expense for 2021 would be:
A) $12,000.
B) $11,000.
C) $60,000.
D) None of these.
Answer: B
Which depreciation method generally will result in the greatest amount of depreciation expense in the first year of the asset's life?
A) Straight-line.
B) Double-declining balance.
C) Activity-based.
D) Capitalization.
Answer: B
The depreciable cost used in calculating depreciation expense is:
A) Its service life.
B) The amount allowable under tax depreciation methods.
C) The difference between its replacement value and cost.
D) The asset's cost minus its estimated residual value.
Answer: D
