A plant asset was purchased on 1 January for $30,000 with an estimated residual value of $6,000 at the end of its useful life. The current year's depreciation expense is $3,000 calculated on the straight-line basis and the balance of the Accumulated depreciation account at the end of the year is $15,000. The remaining useful life of the plant asset is:
A) 10 years.
B) 8 years.
C) 5 years.
D) 3 years.

Question

Quizplus · Accepted Answer

($30,000 - $6,000)/x = $3,000. x = 8 years, $15,000/3,000 = 5 years. The remaining useful life is: 8 - 5 years = 3 years.

A Plant Asset Was Purchased on 1 January for $30,000