Peavey Enterprises purchased a depreciable asset for $22,000 on January 1, Year
ID: 2414813 • Letter: P
Question
Peavey Enterprises purchased a depreciable asset for $22,000 on January 1, Year 1. The asset will be depreciated using the straight-line method over its five-year useful life. Assuming the asset's salvage value is $2,000, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of:
$4,000
$20,000
$5,000
$10,000
Which of the following are principles of the AICPA Code of Professional Conduct? (Mark all that apply)
Conservatism
Integrity
Due Care
Objectivity and Independence
$4,000
$20,000
$5,000
$10,000
Explanation / Answer
1)
Annual depreciation under SLM = (Asset cost-Salvage value)÷Useful life of asset
= ($22,000-$2,000)÷5
= $20,000÷5
= $4,000
Hence, correct option is $4,000.
2)
Integrity refers to the following ethical principles. This the main idea behind formation of AICPA.
Hence, correct option is "Integrity"
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