Question

f an asset was purchased on January 1, Year 1, for $140,000 with an estimated life of 5 years, what is the accumulated depreciation at December 31, Year 4

Answer 1

The answer is "
`\$ 112,000`"

Step-by-step explanation:

`\text{Straight-line method depreciation}=(Asset\ costs)/(Utility \ of \ life)`

`= (\$ 140,000)/(5)\\\\= \$ 28,000`

On 31 December, accumulated depreciation:

`= 4 \ years * \$ 28,000\\\\=\$ 112,000`