Equipment was purchased on January 1 for $39,000 with an estimated residual value of $3,000.The current year's Depreciation Expense is $4,000, calculated on the straight-line basis, and the balance of the Accumulated Depreciation account at the end of the year is $12,000.The remaining useful life of the equipment is
A)3 years.
B)5 years.
C)6 years.
D)9 years.

Question

Quizplus · Accepted Answer

The equipment has a useful life of 6 years, as calculated by dividing the difference between the cost and residual value ($39,000 - $3,000 = $36,000) by the annual depreciation expense ($4,000).

Equipment Was Purchased on January 1 for $39,000 with an Estimated