Bricktown Exchange purchases a copyright for $50,000.The copyright has a remaining legal life of 25 years,but only an expected useful life of five years with no residual value.Assuming the company uses the straight-line method,what is the carrying value at the end of the second year?

Question

Quizplus · Accepted Answer

Using the straight-line method, the annual depreciation would be ($50,000 - $0) / 5 = $10,000. After the second year, the accumulated depreciation would be $10,000 x 2 = $20,000. Therefore, the carrying value at the end of the second year would be $50,000 - $20,000 = $30,000. Thus, the correct answer is D.

Bricktown Exchange Purchases a Copyright for $50,000