An Asset That Cost $16,200 with a Residual Value of $1,200

question 9

Multiple Choice

An asset that cost $16,200 with a residual value of $1,200 and a useful life of 5 years was depreciated for two years using the straight-line method.In the third year,the useful life was determined to be 2 years longer than initially expected.Depreciation in the third year would be

• A)$3,000.
• B)$2,143.
• C)$2,040.
• D)$1,800.

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Definitions:

Recorded By Debits

Transactions in accounting that increase assets or expenses and decrease liabilities, equity, and revenue, captured on the left side of an account.

Decreases

A reduction in the quantity, level, or intensity of something, such as expenses, assets, or liabilities.

Prepaid Insurance

An asset account that represents insurance payments made in advance for coverage extending beyond the current accounting period.

Accounts Payable

Amounts owed by a business to its suppliers shown as a liability on a company’s balance sheet and typically due within a short period of time, often 30 to 90 days.