A piece of equipment costs $250,000, has a useful life of 10 years and an estimated salvage value of $50,000. How much depreciation expense should the company recognize in year 7 if it is using the straight-line method of depreciation?
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A. B. C. D.D
Using the straight line method an equal amount of the cost of the asset less the salvage value is charged to each year of the assets useful life. In this example the value of the equipment being used during its life is $200,000 divided evenly among 10 years.