Question
Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset will be depreciated using the straight-line method
Peavey Enterprises purchased a depreciable asset for $22,000 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 $2,000, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of:
Answers
What are best answers and total votes?
No Votes
Vote
SignIn to Vote
Koala Tutor
Koala Ai Support
$5,000
Explanation:
The depreciable base of the asset is the cost of the asset minus its salvage value. In this case, it is $22,000 - $2,000 = $20,000.
Since the asset is depreciated over four years using the straight-line method, the annual depreciation expense is the depreciable base divided by the useful life. So, $20,000 / 4 = $5,000.
Therefore, Peavey Enterprises should recognize a depreciation expense of $5,000 in Year 2.
Related Questions
The Cookie Shoppe expects sales of 1,800
The most recent financial statements for
Frasier Cabinets wants to maintain a gro
A firm wishes to maintain an internal gr
If the six-month interest rate is 6% and
You enter into an FRA of notional 6 mill
A US-based corporation has decided to ma
You use silver wire in manufacturing. Yo
A project has an initial cost of $159,00
A couple plans to purchase a home for $3