A depreciable asset currently has a $24,500 book value.The company owning the asset uses straight-line depreciation.They paid $37,000 for this asset and consider it to have a $2,000 salvage value with a seven-year useful life.How long has the company owned this asset?
A)2.5 years
B)2.36 years
C)2.1 years
D)7 years
E)Cannot be determined from the given information.

Question

Quizplus · Accepted Answer

The annual depreciation expense is ($37,000 - $2,000) / 7 = $5,000. The accumulated depreciation is $37,000 - $24,500 = $12,500. The company has owned the asset for $12,500 / $5,000 = 2.5 years.

A Depreciable Asset Currently Has a $24,500 Book Value