An Asset Was Purchased for $140,000

question 174

Multiple Choice

An asset was purchased for $140,000.It had an estimated salvage value of $35,000 and an estimated useful life of 10 years.After 5 years of use, the estimated salvage value is revised to $28,000 but the estimated useful life is unchanged.Assuming straight-line depreciation, depreciation expense in Year 6 would be

• A)$21,000.
• B)$14,875.
• C)$11,900.
• D)$17,500.

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Definitions:

Bonus

An extra payment given to employees as an incentive or reward beyond their regular compensation.

Admission Fee

A charge for entry, often used in the context of events, clubs, or institutions.

Capital Balance

The amount of money in a firm's capital account, reflecting the owner's initial investment plus retained earnings.

Profits and Losses

A financial statement that shows the revenue, costs, and expenses over a certain period, determining the company's net income or loss.