Asked by Tyteana Ratliff on May 05, 2024
Verified
What would the depreciation expense be in year 6 for a computer system using the straight-line method when cost is $12,000, residual value is $2000, and the expected life is 8 years? (Round your answer to the nearest dollar.)
A) $1250
B) $2400
C) $2000
D) $625
Residual Value
The estimated value that an asset will realize upon its sale at the end of its useful life, important in calculating depreciation.
Depreciation Expense
The distribution of a tangible asset's cost over its lifespan, treating it as an expenditure.
- Determine the accumulated depreciation and book value at any point during an asset's life.
Verified Answer
FC
Faith ConnellyMay 07, 2024
Final Answer :
A
Explanation :
The depreciation expense using the straight-line method is calculated as (Cost - Residual Value) / Useful Life. For this computer system, it's ($12,000 - $2,000) / 8 = $1,250 per year.
Learning Objectives
- Determine the accumulated depreciation and book value at any point during an asset's life.