at? Yahoo Finance YouTube ETRADE Financial IAI Earnings Calendar FINVZStk Screen

Question

at? Yahoo Finance YouTube ETRADE Financial IAI Earnings Calendar FINVZStk Screener ? Tradin View essment Test-Spring 2018 6 Help Save & Exit Peavey Enterprises purchased a depreciable asset for $23,500 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 $2,300, Peavey Enterprises should recognize depreclation expense in Year 2 in the amount of: Multiple Choice $5,30000 $21,200.00 $5,875.00 $4,416.67 $20,316.67

Explanation / Answer

Solution :

Cost of asset = $23,500

Salvage value = $2,300

Life of asset = 4 years

Depreciable cost = Cost of asset - Salvage value = $23,500 - $2,300 = $21,200

Depreciation expense for year 2 using straight line method = Depreciable cost / Life of asset = $21,200 / 4 = $5,300

Hence first option is correct.

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