On September 1,2017,Acme,Inc,sold its sales manager's company car.The car was purchased in 2010 and was not yet fully depreciated.How many months of depreciation expense should Acme record on the car for the year ended December 31,2017?

Question

Quizplus · Accepted Answer

To calculate the depreciation expense for the year ended December 31, 2017, we need to know the useful life of the car and its salvage value.

Let's assume that the car has a useful life of 10 years and a salvage value of $5,000. The purchase price was $30,000.

Thus, the depreciation expense per year is ($30,000-$5,000)/10 = $2,500.

Since the car was sold on September 1, 2017, Acme can only depreciate the car for eight months from January 1, 2017, to August 31, 2017. Therefore, the depreciation expense for the year ended December 31, 2017, is 8/12 x $2,500 = $1,667.

Hence, the best choice is C) 8.

On September 1,2017,Acme,Inc,sold Its Sales Manager's Company Car