Farley River Inc.
Use the information presented below for Farley River, Inc.for 2015 and 2014 to answer the questions that follow.Farley River uses the straight-line depreciation method.
-Refer to the information for Farley River, Inc.
Using the 2015 data, what is the average life of Farley River's property, plant, and equipment rounded to one decimal place)?

Question

Farley River Inc.
Use the information presented below for Farley River, Inc.for 2015 and 2014 to answer the questions that follow.Farley River uses the straight-line depreciation method. 
-Refer to the information for Farley River, Inc.
Using the 2015 data, what is the average life of Farley River's property, plant, and equipment rounded to one decimal place)?

Quizplus · Accepted Answer

To calculate the average life of property, plant, and equipment, we divide the total depreciable base (beginning PP&E + ending PP&E)/2 by the depreciation expense for the year. 
(1,200 + 1,800)/2 = 1,500 
Depreciation expense for the year = 375 
Average life = 1,500/375 = 4 years. Therefore, the correct answer is C.

Farley River Inc. Use the Information Presented Below for Farley River, Inc.for 2015