Fields Company purchased equipment on January 1 for 180,000 This system has a useful life of 8 years and a salvage value of 20,000 The company estimates that the equipment will produce 40,000 units over its 8-year useful life Actual units produced are: Year 1 - 4,000 units; Year 2-6,000 units; Year 3 -8,00 O units; Year 4-5,000 units; Year 5 -4,000 units; Year 6-5,000 units; Year 7 -7,000 units; Year 8 - 3 ,000 units. What would be the depreciation expense for the second year of its useful life using the straight-line method? 45,000 24,000 33,750 16,000 20,000

To calculate the depreciation expense using the straight-line method, we need to follow these steps:<br /><br />1. **Determine the depreciable cost**: <br /> The depreciable cost is the initial cost of the equipment minus its salvage value. <br /> \[<br /> \text{Depreciable Cost} = \$180,000 - \$20,000 = \$160,000<br /> \]<br /><br />2. **Calculate the annual depreciation expense**: <br /> Using the straight-line method, the annual depreciation expense is the depreciable cost divided by the useful life of the asset. <br /> \[<br /> \text{Annual Depreciation Expense} = \frac{\$160,000}{8 \text{ years}} = \$20,000 \text{ per year}<br /> \]<br /><br />Since the straight-line method results in the same depreciation expense each year, the depreciation expense for the second year would also be \( \$20,000 \).<br /><br />Therefore, the correct answer is \(\$20,000\).