A firm purchases an asset for $50,000 and estimates that it will have a useful life of five years and a salvage value of $5,000.Under the straight-line method,the balance in the accumulated depreciation account,after the second year,will be

Question

Quizplus · Accepted Answer

The annual depreciation expense is calculated as (Cost - Salvage Value) / Useful Life = ($50,000 - $5,000) / 5 = $9,000. After two years, the accumulated depreciation will be 2 * $9,000 = $18,000.

A Firm Purchases an Asset for $50,000 and Estimates That