Jason Moore purchased computer equipment for $2,800 on January 1,2012.It has a residual value of $400 with a useful life of 4 years.After the appropriate adjusting entries have been made,the balance in Accumulated Depreciation account for this asset on January 1,2014,under the straight-line method,should be:

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation as (Cost - Residual Value) / Useful Life. For this asset: ($2,800 - $400) / 4 = $600 per year. By January 1, 2014, two years of depreciation have occurred, so the accumulated depreciation is 2 * $600 = $1,200.

Jason Moore Purchased Computer Equipment for $2,800 on January 1,2012