An asset costing $50,000 has an estimated salvage value of $5,000 and a 5-year useful life. Under the Straight-Line method, what is the annual depreciation expense?

Explanation

Core Concept: Straight-Line Depreciation = (Cost − Salvage Value) / Useful Life = ($50,000 − $5,000) / 5 = $45,000 / 5 = $9,000 per year. Context/Distractors: Option A ignores salvage value ($50,000 / 5 = 10,000). Exam Tip/Key Fact: Always subtract residual (salvage) value before dividing by useful life in straight-line calculation.