A Depreciable Asset Currently Has a $24,500 Book Value

question 83

Multiple Choice

A depreciable asset currently has a $24,500 book value.The company owning the asset uses straight-line depreciation.They paid $37,000 for this asset and consider it to have a $2,000 salvage value with a seven-year useful life.How long has the company owned this asset?

• A)2.5 years
• B)2.36 years
• C)2.1 years
• D)7 years
• E)Cannot be determined from the given information.

---

Definitions:

Fixed Assets

Long-term tangible assets used in business operations, not expected to be converted into cash within a year, such as buildings and machinery.

Current Assets

Items of value that are likely to be cashed in, sold, or expended within the span of a year or throughout the usual functioning period of the company, whichever period lasts longer.

Intangible Assets

Non-physical assets with value, such as patents, copyrights, trademarks, and goodwill, that a business owns.

Copyright

A form of intellectual property that grants the creator exclusive rights to their original works of authorship like writings, music, and artworks.