The following information is available on a depreciable asset owned by Mutual Sa
ID: 2482928 • Letter: T
Question
The following information is available on a depreciable asset owned by Mutual Savings Bank:
The asset's book value is $76,900 on June 1, Year 3. On that date, management determines that the asset's salvage value should be $6,800 rather than the original estimate of $11,800. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be:
$5,007.14
$2,436.61
$2,746.43
$2,082.14
$2,503.57
The following information is available on a depreciable asset owned by Mutual Savings Bank:
Explanation / Answer
Remaining life = 7 years
Value of asset = 76900
Salvage value = 6800
Annual depreciation = (Value of asset – salvage value)/ Remaining life
= (76,900 – 6800)/ 7
= 10014.29
Depreciation for 6 months = Annual depreciation /2
= 10,014.29 /2
= 5,007.14
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