An asset that cost $5,000 has a current book value of $2,000.A revision of the useful life of the asset estimates the asset has a remaining useful life of four years and will have a residual value of $400.Using the straight-line method,the revised depreciation will be $500 per year.

Question

Quizplus · Accepted Answer

The revised annual depreciation would be calculated as (Current Book Value - Residual Value) / Remaining Useful Life = ($2,000 - $400) / 4 = $400 per year.

An Asset That Cost $5,000 Has a Current Book Value