Use the Following Data to Answer Questions 5 Through 9

Use the following data to answer questions 5 through 9:
Davis Company purchased a new piece of equipment on July 1, 2014 at a cost of $1,800,000. The equipment has an estimated useful life of 5 years and an estimated salvage value of $150,000. The current year end is 12/31/15. Davis records depreciation to the nearest month.
-If, at the end of 2016, Davis Company decides the equipment still has five more years of life beyond 12/31/16, with a salvage value of $150,000, what is straight-line depreciation for 2016? (Assume straight-line used in all years.)

A) $180,000.
B) $192,500.
C) $217,500.
D) $330,000.

Correct Answer:

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