A depreciable asset currently has a $40,100 book value.The company owning the asset uses straight-line depreciation.They paid $70,000 for this asset and consider it to have a $1,000 salvage value with a twelve year useful life.How long has the company owned this asset?
A)5.2 years
B)7 years
C)10.2 years
D)12 years
E)Cannot be determined from the given information

Question

Quizplus · Accepted Answer

Annual Depreciation: ($70,000 - $1,000)/12 years = $5,750
Accumulated depreciation: $70,000 cost - $40,100 book value = $29,900
Years owned: $29,900/$5,750 = 5.2 years

A Depreciable Asset Currently Has a $40,100 Book Value