A Company Used Straight-Line Depreciation for an Item of Equipment

question 16

Multiple Choice

A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000 and a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life:

• A) $2,400
• B) $2,000
• C) $5,400
• D) $1,800
• E) $1,000