A company purchased a computer on January 1, 2019 for $40,000 cash. The computer is estimated to have a 5 year useful life, and no salvage value. On January 1, 2020, due to obsolescence, the computer is estimated to have only 2 years of remaining useful life, and the estimated salvage value after the 2 remaining years will be $4,000.
Assuming straight line depreciation, the amount of depreciation expense to be recorded on December 31, 2020 will be:
A) $16,000
B) $12,000
C) $20,000
D) $14,000

Question

Quizplus · Accepted Answer

Annual depreciation = _($₄_{0,000 - $0) / 5 = $}₈_,000 11ee7640_e1cb_fae4_90da_878c2b41afaa_TBCB1007_00 Revised depreciation for Years 2 and 3: $28,000 / 2 = $14,000 per year

A Company Purchased a Computer on January 1, 2019 for $40,000