At the end of 2010, a firm has an estimated average age of its fixed assets of 15 years. If the accumulated depreciation for the firm is $300,000, how much is the depreciation expense for 2010?

A. $30,000.
B. $20,000.
C. $300,000.

Correct Answer: Correct Answer: B

The average life can be calculated by dividing accumulated depreciation by the current year's depreciation expense. Thus, $300,000 divided by depreciation expense is 15 years. Therefore, depreciation expense is $20,000.