Computer Equipment Was Acquired at the Beginning of the Year

question 164

Multiple Choice

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of 8 years. What is the annual straight-line depreciation for the equipment?

• A) $7,650
• B) $8,125
• C) $13,000
• D) $12,250

---

Definitions:

Fair Value

An estimate of the market value of an asset or liability based on current market prices or valuations.

Consideration Transferred

The total value of assets, liabilities, or equity given up to acquire control of another entity or asset.

Acquisition Method

An accounting method for business combinations where the acquirer is required to measure and recognize the assets acquired, liabilities assumed, and any noncontrolling interest at their fair values at the acquisition date.

Stock Issuance Costs

Expenses directly incurred by a company when it issues new shares of stock, such as legal and underwriting fees.