Using the Information Below Calculate the Average Total Depreciable Life $\text { Information from the Balance Sheet: }$

question 59

Multiple Choice

Using the information below calculate the average total depreciable life of the assets: $\text { Information from the Balance Sheet: }$

$\begin{array}{llll}&2012&2011\\\text { Depreciable Assets } & \$ 475,000 & \$ 385,000 \\\text { Accumulated Depreciation } &\underline{(150,000) }&\underline{(95,000) }\\ \text { Depreciable Assets(Net) } & \$325,000& \$ 290,000\end{array}$ $\begin{array}{llcc} \text {From the Income Statement } &2012 \\ \text { Depreciation Expense } &\$47,000\\\end{array}$

• A) 6.54 years
• B) 10.10 years
• C) 6.91 years
• D) 9.15 years

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Definitions:

Capital Loss

A financial loss that occurs when the selling price of an investment is less than its purchase price.

Gift Tax

A federal tax on the transfer of property by gift from one individual to another, where the giver receives nothing or less than full value in return.

Assumed Mortgage

When a property buyer takes over the seller's existing mortgage, it is referred to as an assumed mortgage.

Recognized Gain

The portion of a gain that is subject to tax, as realized from the sale or exchange of a capital asset beyond the original purchase price.