Question

Cambodian Import Company purchased a depreciable asset for $160,000 on April 1, 2014. The estimated salvage value is $40,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on March 1, 2017 when the asset is sold?(a)$66,000.(b)$70,000.(c)$72,000.(d)$186,667.

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Cambodian Import Company purchased a depreciable asset for $160,000 on April 1, 2014. The estimated salvage value is $40,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation.

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (160,000 - 40,000)/5= 24,000

Accumulated depreciation= 24,000*2 + 24,000/12*11= $70,000