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.Ace Electronics uses the straight-line method to depreciate its assets.At December 31,2011,Ace will have accumulated depreciation of ________.

Question

Quizplus · Accepted Answer

The straight-line depreciation method divides the cost of the asset by its useful life. For a $400,000 computer with a 5-year life, the annual depreciation is $400,000 / 5 = $80,000. Thus, accumulated depreciation at December 31, 2011, is $80,000.

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