On January 1,2011,Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information.The computer has a 5-year useful life,after which it will be worthless because it will be obsolete.How much depreciation expense should Ace Electronics record for the year ended December 31,2011,using the straight-line method?

Question

Quizplus · Accepted Answer

The straight-line depreciation method divides the cost of the asset by its useful life. $400,000 divided by 5 years equals $80,000 per year.

On January 1,2011,Ace Electronics Paid $400,000 Cash for a Computer