On june 1, michael company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. using straight-line depreciation, calculate depreciation expense for the second year.

a. $17,500

b. $30,000

c. $40,000

d. $12,500

Cost of equipment = $120,000

Depreciable cost = $90,000

Useful life = 3 years or 30,000 hours of operation

Depreciation per year = Depreciable cost/3 = 90,000/3 = $30,000

Yr 1 depreciation expense = $30,000

Yr 2 depreciation expense = $30,000

Yr 3 depreciation expense = $30,000

Therefore, the correct answer is b.