Answer:
D. $77,000
Explanation:
Depreciation expense using the straight line depreciation method = (Cost of asset - Salvage value) / useful life
($80,000 - $20,000) / 5 = $12,000
Accumulated Depreciation between October 1, 2013 and December 31, 2013 = (3/12) x $12,000 = $3,000
Book value = Cost of asset - accumulated deprecation
= $80,000 - $3,000 = $77,000
I hope my answer helps you
Answer:
D. $77,000
Explanation:
Depreciation is the recording of asset expense due to its use. It is due to use of fair value of the asset after use. The expense value reduces the asset value over useful life period.
As per given data
Cost of Asset = $80,000
Useful life= 5 years
Salvage Value = $20,000
Asset is purchased on October 1, 2013 and on December 31, 2013 depreciation of only 3 months has accrued.
Depreciation per year = (Cost of Asset - Salvage Value) / Useful life = ($80,000 - $20,000)/ 5 = $12,000
Depreciation Expense for the year 2013 = $12,000 x 3/12 = $3,000
Book value of the asset is the net of accumulated depreciation of the asset. The accumulated depreciation on December 31, 2013, is $3,000
Book Value = Cost - Accumulated Depreciation = $80,000 - $3,000 = $77,000
