Everett, Inc.
Information for Everett, Inc. for 2011 and 2010 is presented below. Everett uses the straight-line depreciation method.
$\begin{array}{lll}
&\underline{2011}&\underline{2010}\
\text { Fixed assets } & \$ 250,000 & \$ 190,000 \
\text { Accumulated depreciation } & 100,000 & 85,000 \
\text { Depreciation expense } & 62,500 & 47,500 \
\text { Total revenues } & 525,000 & 405,000 \
\text { Total assets } & 625,000 & 475,000
\end{array}$
- Refer to the information provided for Everett, Inc. Using the data for 2011, determine the average useful life of Everett's fixed assets rounded to one decimal place.
A) 1.60 years
B) 3.50 years
C) 4.00 years
D) 10.00 years

Question

Everett, Inc. 
Information for Everett, Inc. for 2011 and 2010 is presented below. Everett uses the straight-line depreciation method.
$\begin{array}{lll}
&\underline{2011}&\underline{2010}\
\text { Fixed assets } & \$ 250,000 & \$ 190,000 \
\text { Accumulated depreciation } & 100,000 & 85,000 \
\text { Depreciation expense } & 62,500 & 47,500 \
\text { Total revenues } & 525,000 & 405,000 \
\text { Total assets } & 625,000 & 475,000
\end{array}$
- Refer to the information provided for Everett, Inc. Using the data for 2011, determine the average useful life of Everett's fixed assets rounded to one decimal place.
A) 1.60 years
B) 3.50 years
C) 4.00 years
D) 10.00 years

Quizplus · Accepted Answer

The average useful life of fixed assets is calculated by dividing the gross amount of fixed assets by the annual depreciation expense. The choice C, 4.00 years, is the most reasonable estimate based on typical depreciation rates and asset lifespans.

Everett, Inc - Refer to the Information Provided for Everett, Inc