A two-year-old asset has a useful life of 10 years. Its initial purchase cost was $450,000, and it is depreciated by 10 percent annually. What is the remaining depreciable value of the asset?
A) $0
B) $90,000
C) $200,000
D) $360,000

Question

Quizplus · Accepted Answer

The annual depreciation amount is calculated as 10% of the initial purchase cost, which is $45,000 ($450,000 x 0.1). After two years, the accumulated depreciation would be $90,000 ($45,000 x 2). The remaining depreciable value can be found by subtracting the accumulated depreciation from the initial purchase cost: $450,000 - $90,000 = $360,000. Therefore, the remaining depreciable value of the asset is $360,000.

A Two-Year-Old Asset Has a Useful Life of 10 Years