A computer was bought for $2 000. After three years of service it can be sold for $500. If straight line depreciation is assumed, what was the computer's book value at the end of year 2?
A)$2 000
B)$1 500
C)$1 000
D)$500
E)$0

Question

Quizplus · Accepted Answer

The computer depreciates $1500 over 3 years ($2000 - $500), which is $500 per year. After 2 years, it has depreciated $1000, so its book value is $2000 - $1000 = $1000.

A Computer Was Bought for $2 000