High School

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Given the following information for Sookie's Cookies, calculate the depreciation expense:

Sales = $89,913

A. $0
B. $89,913
C. Depreciation cannot be determined from the given information
D. Insufficient information to calculate depreciation

Answer :

Final answer:

Depreciation expense for Sookie's Cookies cannot be determined solely based on sales figures as additional information about the asset's cost, useful life, and salvage value is necessary.So, the correct option is c) Depreciation cannot be determined from the given information.

Explanation:

The student asked how to calculate the depreciation expense for Sookie's Cookies based solely on sales figures. The answer to this question is that depreciation cannot be determined from the given information. Depreciation is a way of allocating the cost of a tangible asset over its useful life but to calculate it, you need additional information about the asset such as its cost, salvage value, and useful life.

For instance, using an example of office furniture purchased for $20,000 with a useful life of 10 years and a salvage value of $2,500, the annual depreciation using the straight-line method would be ($20,000 \\$2,500)/10, which equals $1,750 per year. However, without such information on Sookie's Cookies' assets, the depreciation cannot be calculated, hence the answer is, 'Depreciation cannot be determined from the given information'.

So, the correct option is c) Depreciation cannot be determined from the given information.

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