Peavey Enterprises purchased a depreciable asset for $22,000 on April 1,Year 1.The asset will be depreciated using the straight-line method over its four-year useful life.Assuming the asset's salvage value is $2,000,what will be the amount of accumulated depreciation on this asset on December 31,Year 3?
A)$5,000
B)$15,000
C)$15,125
D)$20,000
E)$13,750

Question

Quizplus · Accepted Answer

The annual depreciation is ($22,000 - $2,000) / 4 = $5,000. From April 1, Year 1 to December 31, Year 3 is 2 years and 9 months. For 2 full years, depreciation is 2 * $5,000 = $10,000. For 9 months, it is (9/12) * $5,000 = $3,750. Total accumulated depreciation is $10,000 + $3,750 = $13,750.

Peavey Enterprises Purchased a Depreciable Asset for $22,000 on April