The balance in accumulated depreciation on January 1 and December 31 is $12,000 and $9,000, respectively, during a year in which an asset with a cost of $4,000 and net book value of $0 was retired. Depreciation expense for the current year is:

Question

Quizplus · Accepted Answer

The accumulated depreciation decreased by $3,000 ($12,000 - $9,000). Since an asset with a net book value of $0 was retired, it means its accumulated depreciation was $4,000. Therefore, the depreciation expense for the current year is $1,000 ($3,000 decrease + $4,000 retired asset).

The Balance in Accumulated Depreciation on January 1 and December