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 31,2012,Ace will have accumulated depreciation of ________.

Question

Quizplus · Accepted Answer

The computer depreciates at a rate of $400,000 / 5 years = $80,000 per year. After 2 years (by December 31, 2012), the accumulated depreciation would be $80,000 * 2 = $160,000.

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