Use the information presented below for Chambersburg Corp.for 2017 and 2016 to answer the questions that follow.Chambersburg uses the straight-line depreciation method. $\begin{array}{lrr}
&\mathbf{2 0 1 7} & \mathbf{2 0 1 6} \
\text { Property, plant, and equipment }&\$ 250,000 & \$ 190,000 \
\text {Accumulated depreciation }&100,000 & 85,000 \
\text { Depreciation expense }&62,500 & 47,500 \
\text { Net sales }&1,000,000 & 900,000 \
\text { Average Total assets }&625,000 & 475,000\
\end{array}$
-Refer to the information for Chambersburg Corp. ?
Using the 2017 data, what is the average life of Chambersburg's property, plant, and equipment (rounded to one decimal place)?
A) 1.6 years
B) 2.5 years
C) 4.0 years
D) 10.0 years

Question

Use the information presented below for Chambersburg Corp.for 2017 and 2016 to answer the questions that follow.Chambersburg uses the straight-line depreciation method. $\begin{array}{lrr}
&\mathbf{2 0 1 7} & \mathbf{2 0 1 6} \
\text { Property, plant, and equipment }&\$ 250,000 & \$ 190,000 \
\text {Accumulated depreciation }&100,000 & 85,000 \
\text { Depreciation expense }&62,500 & 47,500 \
\text { Net sales }&1,000,000 & 900,000 \
\text { Average Total assets }&625,000 & 475,000\
\end{array}$ ​
-Refer to the information for Chambersburg Corp. ?
Using the 2017 data, what is the average life of Chambersburg's property, plant, and equipment (rounded to one decimal place)?
A) 1.6 years
B) 2.5 years
C) 4.0 years
D) 10.0 years

Quizplus · Accepted Answer

The average life of property, plant, and equipment is calculated by dividing the cost of the asset by the annual depreciation expense. In this case, the cost of the asset is $250,000 and the annual depreciation expense is $62,500. Therefore, the average life of the asset is $250,000 / $62,500 = 4.0 years.

Use the Information Presented Below for Chambersburg Corp ​ -Refer to the Information for Chambersburg Corp

Use the Information Presented Below for Chambersburg Corp
-Refer to the Information for Chambersburg Corp