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

question 65

Multiple Choice

A company used straight-line depreciation for an item of equipment that cost $12,000, had a residual value of $2,000, and had a five-year useful life. After depreciating the asset for three complete years, the residual value was reduced to $1,200 and its total useful life was increased from 5 years to 6 years. Determine the amount of depreciation to be charged against the machine during each of the remaining years of its useful life:

• A) $1,000.
• B) $1,800.
• C) $1,467.
• D) $1,600.
• E) $2,160.

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Definitions:

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Aortic Valve

A valve in the human heart between the left ventricle and the aorta that prevents blood from flowing back into the ventricle.