Straight-Line Depreciation at Fixed Rate

Steps:

• Annual depreciation = 20% × $30,000 cost =$6,000.
• Year 1 depreciation = $6,000.
• Year 2 depreciation = $6,000.
• Accumulated depreciation = $6,000 +$6,000 = $12,000.

Why B is correct:

• Straight-line method uses a constant rate of 20% on original cost, yielding $6,000 annually as specified.

Why the others are wrong:

• A: Assumes depreciation only on $25,000 depreciable base ($30,000 - $5,000 salvage) over 5 years ($5,000/year × 2), ignoring the given 20% rate.

Final answer: B