Using the information below calculate the average total depreciable life of the assets:
A) 6.54 years
B) 10.10 years
C) 6.91 years
D) 9.15 years

Question

Using the information below calculate the average total depreciable life of the assets:  
A) 6.54 years 
B) 10.10 years 
C) 6.91 years 
D) 9.15 years

Quizplus · Accepted Answer

To calculate the average total depreciable life of the assets, we need to add the useful life of both assets and divide by 2 (assuming both assets have the same weightage). 
Asset 1: 
Total depreciable life = (Original Cost - Salvage Value) / Annual Depreciation Expense = (50,000 - 5,000) / 7,500 = 6.67 years

Asset 2: 
Total depreciable life = (Original Cost - Salvage Value) / Annual Depreciation Expense = (40,000 - 4,000) / 4,000 = 9 years

Thus, the average total depreciable life of the assets = (6.67 + 9) / 2 = 7.835 years, which is closest to Option D) 9.15 years.

Using the Information Below Calculate the Average Total Depreciable Life