An asset that was originally purchased for $46,000 has an estimated salvage value of $4,000 and a 7 year life. The depreciation on the asset has been properly recorded through the end of Year 2 using the straight-line method. Assuming the asset is sold on March 31 of Year 3, what is the appropriate amount of depreciation to record before accounting for the disposal?
A)$6,000.
B)$1,500.
C)$4,500.
D)$1,643.
E)No entry is needed prior to recording the disposal.

Question

Quizplus · Accepted Answer

The annual depreciation is ($46,000 - $4,000) / 7 = $6,000. For 3 months in Year 3, the depreciation is $6,000 / 12 * 3 = $1,500.

An Asset That Was Originally Purchased for $46,000 Has an Estimated