What would the accumulated depreciation at the end of year 3 for a computer system using the straight-line method when cost is $5,000,residual value is $1,000,and the expected life is 4 years?

Question

Quizplus · Accepted Answer

Straight-line method means that the same amount of depreciation will be charged every year. To find out the annual depreciation charge, we need to subtract the residual value from the cost, and then divide by the number of years of expected life:
($5,000 - $1,000) / 4 = $1,000
So, the annual depreciation charge is $1,000. At the end of year 3, the accumulated depreciation will be:
3 years × $1,000 = $3,000. Therefore, the answer is C.

What Would the Accumulated Depreciation at the End of Year