ABC Co. purchased a building for $300,000. It is expected to have a useful life of 30 years and a residual (salvage) value of $75,000. Using straight-line depreciation, what is the amount of annual depreciation expense that should be included on the income statement in years 1-30? (Show your work!)

a) $12,500 b) $10,000 c) $7,500 d) None of the above

ABC has an asset that is being depreciated over 5 years at $3,500 per year. What is the amount of accumulated depreciation that would be included on the balance sheet at the end of year 3?

a) $3,500 b) $10,500 c) $2,100 d) There is not enough information to determine