5-A company purchased a computer system on March 1. Its cost was $35,000?, and i

Question

5-A company purchased a computer system on March 1. Its cost was $35,000?, and it had an estimated salvage value of $7,000 It was expected to have a useful life of five years. To the nearest?dollar, the depreciation for year 1 using? straight-line depreciation will? be: (Assume company? year-end is December 31. Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar. Do not convert the useful life of the asset to? months.)

A.

$5,600.

B.

$4,200.

C.

$4,648.

D.

$7,000.

Explanation / Answer

The answer is $4,667

Working:

Cost of the asset 35000 Salvage value 7000 Depreciable value 28000 Estimated life - years 5 Annual depreciation (28,000 / 5) 5600 Date of purchase March.1 Period of usage in first year 10 months Depreciation for the first year           4,667     (5,600 * 10 / 12)

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