Elmore Co. purchased an offset press on January 1, 2006, at a cost of $120,000. The press had an estimated eight-year life with no residual value. Elmore uses straight-line depreciation. At December 31, 2009, Elmore estimated that the press would have only two more years of remaining life with no residual value. For 2009, Elmore would report depreciation of:
A)$25,000.
B)$15,000.
C)$20,000.
D)$30,000.$75,000 3 = $25,000

Question

Quizplus · Accepted Answer

The original annual depreciation was $15,000 ($120,000 / 8 years). By the end of 2009, 4 years of depreciation have been recorded, leaving a book value of $60,000. With a revised remaining life of 2 years, the new annual depreciation is $30,000 ($60,000 / 2 years).

Elmore Co Purchased an Offset Press on January 1, 2006, at at a Cost