When originally purchased,a vehicle costing $23,000 had an estimated useful life of 8 and an estimated salvage value of $1,500.After 4 years of straight-line depreciation,the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value.The depreciation expense in year 5 equals:
A)$5,375.00.
B)$2,687.50.
C)$5,543.75.
D)$10,750.00.
E)$2,856.25.

Question

Quizplus · Accepted Answer

The correct answer is A.The depreciation expense in year 5 is $5,375.00. This is calculated as follows:Depreciation expense = (Cost of asset - Salvage value) / Useful life= (23,000 - 1,500) / 6= 21,500 / 6= $5,375.00

When Originally Purchased,a Vehicle Costing $23,000 Had an Estimated Useful