Peavey enterprises purchased a depreciable asset for $28,500 on april 1, year 1. the asset will be depreciated using the straight-line method over its four-year useful life. assuming the asset's salvage value is $3,300, what will be the amount of accumulated depreciation on this asset on december 31, year 3? $6,300 $25,200 $5,250 $21,000 $17,325

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Business

Mia Carrillo

30 August, 06:54

Peavey enterprises purchased a depreciable asset for $28,500 on april 1, year 1. the asset will be depreciated using the straight-line method over its four-year useful life. assuming the asset's salvage value is $3,300, what will be the amount of accumulated depreciation on this asset on december 31, year 3? $6,300 $25,200 $5,250 $21,000 $17,325

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Davies · Answer 1

Answer is $17,325. Since the salvage value of the asset after its four years of useful life is $3,300 while its current purchase value is $28,500; we need to depreciate the difference over 4 years. That us $25,200 to be depreciated over 4 years using a straight line method. At December 31 of year 3, the asset will be 2.75 years old (2 years, 9 months). Hence the accumulated depreciation is $25,500 * (2.75/4). This is $17,325.