Equipment with a Cost of $160,000, an Estimated Residual Value

question 61

Multiple Choice

Equipment with a cost of $160,000, an estimated residual value of $10,000, and an estimated life of 4 years, was purchased on April 1, 2022.If the straight-line method is used, the depreciation expense for calendar 2022 is

• A)$40,000.
• B)$37,500.
• C)$30,000.
• D)$28,125.

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Definitions:

Markup Rate

The percentage increase applied to the cost price of goods to calculate the selling price.

Selling Price

The amount of money for which a good or service is offered for sale to consumers.

Similar Triangles

Triangles that have identical angles and proportional sides but may differ in size.

Proportional

Being proportional means two quantities maintain a constant ratio or relationship relative to one another, exemplified by the equation \(y = kx\), where \(k\) is the constant of proportionality.