Depreciation Questions Straight Line – No Salvage

Question 1

1. Diggers Inc. bought a new backhoe for $100,000. How much was depreciated each year? Assume straight line depreciation, a 5-year life, and no salvage value.

A. $10,000
B. $12,000
C. $18,000
D. $20,000

Answer 1

1. D
   (Depreciable total ÷ years of depreciation = depreciation per year)
   100,000 is Cost Basis or Purchase Price or Depreciable Total
   100,000 ÷ 5 = 20,000

Question 2

2. ABC Paints bought a new truck for $25,000. How much was total depreciation in years 2 and 3? Assume straight line depreciation, a 5-year life, and no salvage value.

A. $2,000
B. $8,000
C. $9,200
D. $10,000

Answer 2

2. D
   (Depreciable total ÷ years of depreciation = depreciation per year)
   25,000 is Cost Basis or Purchase Price or Depreciable Total 25,000 ÷ 5 = 5,000
   5,000 x 2 = 10,000 (Years 2 and 3, totaled)

Question 3

3. Joe’s Landscaping bought a new truck for $65,000. What was the total depreciation? Assume straight line depreciation, a 5-year life, and no salvage value.

A. $60,000
B. $65,000
C. $72,000
D. $76,000

Answer 3

3. B 65,000 is Cost Basis or Purchase Price or Depreciable Total
   65,000 is all depreciated.

Question 4

4. Super Builders, LLC bought a new crane for $350,000. How much was depreciated each year? Assume straight line depreciation, a 7-year life, and no salvage value.

A. $50,000
B. $52,000
C. $58,600
D. $62,100

Answer 4

4. A
   (Depreciable total ÷ years of depreciation = depreciation per year)
   350,000 is Cost Basis or Purchase Price or Depreciable Total
   350,000 ÷ 7 = 50,000

Question 5

5. Cloud Airlines bought a new airplane for $520,000. What was the amount depreciated in years 1 and 2 in total? Assume straight line depreciation, a 10-year life, and no salvage value.

A. $84,000
B. $96,000
C. $104,000
D. $118,000

Answer 5

5. C

(Depreciable total ÷ years of depreciation = depreciation per year)
520,000 is Cost Basis or Purchase Price or Depreciable Total 520,000 ÷ 10 = 52,000
52,000 x 2 = 104,000

Question 6

6. Blackbeard Salvage bought a new boat for $212,000. How much was depreciated in year 1? Assume straight line depreciation, a 7-year life, and no salvage value.

A. $19,400
B. $22,080
C. $27,560
D. $30,287

Answer 6

6. D
   (Depreciable total ÷ years of depreciation = depreciation per year)
   212,000 is Cost Basis or Purchase Price or Depreciable Total
   212,000 ÷ 7 = 30,287

Question 7

7. Deadwood Lumber bought a new truck for $94,000. How much was depreciated each year? Assume straight line depreciation, a 5-year life, and no salvage value.

A. $16,000
B. $18,800
C. $19,000
D. $19,200

Answer 7

7. B
   (Depreciable total ÷ years of depreciation = depreciation per year)
   94,000 is Cost Basis or Purchase Price or Depreciable Total
   94,000 ÷ 5 = 18,800

Question 8

8. Northern Snowtown Partners bought a new snow maker for $108,000. How much was depreciated in year 5? Assume straight line depreciation, a 5-year life, and no the salvage value.

A. $21,600
B. $22,400
C. $23,010
D. $28,200

Answer 8

8. A
   (Depreciable total ÷ years of depreciation = depreciation per year)
   108,000 is Cost Basis or Purchase Price or Depreciable Total
   108,000 ÷ 5 = 21,600

Question 9

9. Yellow Inc. bought a new school bus for $180,000. How much was depreciated in total for all years? Assume straight line depreciation, a 5-year life, and no salvage value.

A. $150,000
B. $160,000
C. $170,000
D. $180,000

Answer 9

9. D 180,000 is Cost Basis or Purchase Price or Depreciable Total

Question 10

10. Private Orbits Inc. bought a new rocket for $4,000,000. How much was depreciated each year? Assume straight line depreciation, a 5-year life, and no salvage value.

A. $800,000
B. $840,000
C. $920,000
D. $1,000,000

Answer 10

10. A
    (Depreciable total ÷ years of depreciation = depreciation per year)
    4,000,000 is Cost Basis or Purchase Price or Depreciable Total
    4,000,000 ÷ 5 = 800,000