When Originally Purchased,a Vehicle Had an Estimated Useful Life of 8

question 131

Multiple Choice

When originally purchased,a vehicle had an estimated useful life of 8 years.The vehicle cost $25,000 and its estimated residual value is $3,000.After 3 years of straight-line depreciation,the asset's total estimated useful life was revised from 8 years to 5 years and there was no change in the estimated residual value.The depreciation expense in year 4 is

• A)$6,875.
• B)$4,400.
• C)$4,125
• D)$1,650.

---

Definitions:

Consulting Revenues

Income generated by a firm through the provision of advisory or consultancy services.

Additional Investment

Extra funds invested into a business by its owners or shareholders over and above the initial or previous investments.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest in the company.