Question

f an asset was purchased on January 1, Year 1, for $140,000 with an estimated life of 5 years, what is the accumulated depreciation at December 31, Year 4

Answer 1

Answer:

The answer is "$\ 112,000$"

Explanation:

$\text{Straight-line method depreciation}=\frac{Asset\ costs}{Utility \ of \ life}$

                                                     $= \frac{\ 140,000}{5}\\\\= \ 28,000$

On 31 December, accumulated depreciation:

 $= 4 \ years \times \ 28,000\\\\=\ 112,000$