An asset was purchased for $120,000 on January 1,Year 1 and originally estimated to have a useful life of 10 years with a residual value of $10,000.At the beginning of the third year,it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000.Calculate the third-year depreciation expense using the revised amounts and straight-line method.
A)$24,000
B)$25,000
C)$11,000
D)$24,500

Question

Quizplus · Accepted Answer

The third-year depreciation expense is calculated as follows:Depreciation expense = (Cost - Residual value) / Useful life= (120,000 - 2,000) / 4= 24,000

An Asset Was Purchased for $120,000 on January 1,Year 1