question 25 (mandatory) (5 points)\non june 1, scotter company purchased equipment at a cost of $120,000…

question 25 (mandatory) (5 points)\non june 1, scotter company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours.\nusing straight - line depreciation, calculate depreciation expense for the first year.\n$12,500\n$30,000\n$17,500\n$40,000

question 25 (mandatory) (5 points)\non june 1, scotter company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours.\nusing straight - line depreciation, calculate depreciation expense for the first year.\n$12,500\n$30,000\n$17,500\n$40,000

Answer

Explanation:

Step1: Identify straight - line formula

Annual depreciation = $\frac{\text{Depreciable cost}}{\text{Useful life in years}}$

Step2: Substitute values

Depreciable cost = $90000$, Useful life in years = 3 Annual depreciation = $\frac{90000}{3}=30000$

Step3: Adjust for partial - year (purchased on June 1)

The asset is used for 7 months in the first year (June - December). Monthly depreciation = $\frac{30000}{12}=2500$ Depreciation for first year = $2500\times7 = 17500$

Answer:

$17,500$