Custom Closets purchased office fixtures on January 1.The cost was $12,000,and the fixtures had a residual value of $2,000.The fixtures were given a useful life of 8 years.After the end of three years,it was determined that the fixtures would be obsolete in 2 more years and their residual value would still be $2,000.What will be the depreciation under the straight-line method to the nearest dollar be for the fourth year?

Question

Quizplus · Accepted Answer

The remaining book value after 3 years is $7,500. With 2 years left, the annual depreciation is ($7,500 - $2,000) / 2 = $2,750.

Custom Closets Purchased Office Fixtures on January 1