A company purchased new furniture at a cost of $14,000 on September 30.The furniture is estimated to have a useful life of 8 years and a salvage value of $2,000.The company uses the straight-line method of depreciation.What is the book value of the furniture on December 31 of the first year?
A)$13,562.50
B)$12,250.00
C)$12,500.00
D)$13,500.00
E)$13,625.00

Question

Quizplus · Accepted Answer

The annual depreciation is ($14,000 - $2,000) / 8 = $1,500. For three months (October to December), the depreciation is $1,500 * (3/12) = $375. The book value on December 31 is $14,000 - $375 = $13,625.

A Company Purchased New Furniture at a Cost of $14,000