Answered

IDNLearn.com: Your one-stop platform for getting reliable answers to any question. Discover the information you need from our experienced professionals who provide accurate and reliable answers to all your questions.

every computer that a business owner purchases will lose most of its value after 5 years of use. the owner plans to purchase a computer for $2.100 and replace it after 4 years.

The business owner bought a computer that cost $2,400 instead of $2,100. the owner plans to replace the computer after 3 years instead of 4 years. Comparing both methods, which statement is true about the remaining value of this computer after 3 years of use ?

Sagot :

Anthougoidn

Answer:

Step-by-step explanation:

a) Data and Calculations:

Estimated useful life of a computer = 5 years

Cost of a computer purchased = $2,400

Annual depreciation expense = $480 ($2,400/5)

This means that the business owner chooses to spread (expense) the cost of the computer over 5 years at a rate of $480.

After 3 years, the cost already expensed = $1,440 ($480 * 3)

The Remaining value of this computer after 3 years of use will be $960 ($2,400 - $1,440).

b) Depreciation is an accounting method for spreading (or expensing) the cost of a long-term asset over its useful life.

Your presence in our community is highly appreciated. Keep sharing your insights and solutions. Together, we can build a rich and valuable knowledge resource for everyone. Your search for solutions ends at IDNLearn.com. Thank you for visiting, and we look forward to helping you again.