doorglam paid $42,000 for office furniture. the furniture is depreciated using the straight - line method…

doorglam paid $42,000 for office furniture. the furniture is depreciated using the straight - line method and has an estimated service life of 7 years and no residual value. after three years of use, the accumulated depreciation of the furniture will be: \n\na. $24,000 \nb. $36,000 \nc. $18,000 \nd. $42,000

doorglam paid $42,000 for office furniture. the furniture is depreciated using the straight - line method and has an estimated service life of 7 years and no residual value. after three years of use, the accumulated depreciation of the furniture will be: \n\na. $24,000 \nb. $36,000 \nc. $18,000 \nd. $42,000

Answer

Explanation:

Step1: Calculate annual depreciation

Annual depreciation = $\frac{\text{Cost of asset - Residual value}}{\text{Useful life}}$ Here, cost = $42000$, residual value = $0$, useful life = $7$ years. Annual depreciation = $\frac{42000 - 0}{7}=6000$

Step2: Calculate accumulated depreciation after 3 years

Accumulated depreciation = Annual depreciation $\times$ Number of years Accumulated depreciation = $6000\times3 = 18000$

Answer:

C. $18,000$