Question: ZyCo uses the straight-line method. Assets purchased between the 1 st and 15 th are depreciated for the entire month; assets purchased after the 15

  1. ZyCo uses the straight-line method. Assets purchased between the 1st and 15th are depreciated for the entire month; assets purchased after the 15th as though they were acquired the following month. On May 2, 20X1, ZyCo purchases for $25,000 furniture that it expects to last for 10 years and to have a residual value of $1,000. What is the balance in the accumulated depreciation account at the end of 20X3?

    A.

    $6,400
    B.

    $6,400
    C.

    $7,200
    D.

    Insufficient information to calculate

Under GAAP, the straight-line depreciation rate equals:

A.

Depreciable base/Years of estimated life
B.

Depreciation rate Depreciable base
C.

(Original cost Residual value)/Years of estimated life
D.

1/Years of estimated life

  1. On January 1, 20X1, PrimeCo, which uses the straight-line method, purchases for $59,000 a machine that it expects to last for 10 years and to have a residual value of $8,000. What is the balance in the Accumulated Depreciation account at the end of 20X4?

    A.

    $20,400
    B.

    $15,300
    C.

    $23,600
    D.

    $38,600

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