In the asset scenario, what is the amount of depreciation claimed?

In the asset scenario, what is the amount of depreciation claimed?

• A. $600
• B. $700
• C. $800
• D. $900

Answer: (B)

Depreciation is the process of spreading an asset’s cost over the years it’s expected to be used. In most farm asset problems, the straight‑line method is used unless another method is specified. That means you take the asset’s initial cost, subtract any salvage (residual) value at the end of its useful life, and then divide by the asset’s useful life in years. The result is the annual depreciation you can claim. So in this scenario, you would apply that straight‑line formula with the numbers given for cost, salvage value, and useful life. The annual amount you compute from those values is the depreciation claimed in the problem, which is why the listed figure is the correct choice. The other amounts wouldn’t match the calculation using the scenario’s data.

Depreciation is the process of spreading an asset’s cost over the years it’s expected to be used. In most farm asset problems, the straight‑line method is used unless another method is specified. That means you take the asset’s initial cost, subtract any salvage (residual) value at the end of its useful life, and then divide by the asset’s useful life in years. The result is the annual depreciation you can claim.

So in this scenario, you would apply that straight‑line formula with the numbers given for cost, salvage value, and useful life. The annual amount you compute from those values is the depreciation claimed in the problem, which is why the listed figure is the correct choice. The other amounts wouldn’t match the calculation using the scenario’s data.