If an asset was purchased on January 1, 2006 for $140,000 with an estimated life of 5 years, what is the accumulated depreciation at December 31, 2009?
A) $28,000.
B) $112,000.
C) $56,000.
D) $84,000.

Question

Quizplus · Accepted Answer

The asset was purchased on January 1, 2006, so it has been in service for 4 years as of December 31, 2009. The asset has an estimated life of 5 years, so the annual depreciation expense is $140,000 / 5 = $28,000. The accumulated depreciation at December 31, 2009 is $28,000 * 4 = $112,000.

If an Asset Was Purchased on January 1, 2006 for $140,000