Emir Company purchased equipment that cost $110,000 cash on January 1, Year 1. The equipment had an expected useful life of six years and an estimated salvage value of $8,000. Assuming that Emir depreciates its assets under the straight-line method, the amount of depreciation expense appearing on the Year 4 income statement and the amount of accumulated depreciation appearing on the December 31, Year 4, balance sheet would be:

Depreciation expense Accumulated depreciation

A. $ 17,000 $ 17,000

B. $ 17,000 $ 68,000

C. $ 68,000 $ 17,000

D. $ 17,000 $ 51,000

Multiple Choice

Option A

Option B

Option C

Option D

Question

Business

Pitts

14 April, 11:17

Emir Company purchased equipment that cost $110,000 cash on January 1, Year 1. The equipment had an expected useful life of six years and an estimated salvage value of $8,000. Assuming that Emir depreciates its assets under the straight-line method, the amount of depreciation expense appearing on the Year 4 income statement and the amount of accumulated depreciation appearing on the December 31, Year 4, balance sheet would be:

Depreciation expense Accumulated depreciation

A. $ 17,000 $ 17,000

B. $ 17,000 $ 68,000

C. $ 68,000 $ 17,000

D. $ 17,000 $ 51,000

Multiple Choice

Option A

Option B

Option C

Option D

+1

Answers (1)

Know the Answer?

Shyla Mercado · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Emir Company purchased equipment that cost $110,000 cash on January 1, Year 1. The equipment had an expected useful life of six years and an estimated salvage value of $8,000.

Annual depreciation = (original cost - salvage value) / estimated life (years)

Annual depreciation = (110,000 - 8,000) / 6 = 17,000

Year 4:

Depreciation = 17,000

Accumulated depreciation = 17,000*4 = 68,000