What will be the value of an imaging system after three years using straight-line depreciation if the acquisition cost was $150,000 and the useful life is five years?

What will be the value of an imaging system after three years using straight-line depreciation if the acquisition cost was $150,000 and the useful life is five years?

• A. $30,000
• B. $60,000
• C. $90,000
• D. $150,000

Answer: (B)

To determine the value of the imaging system after three years using straight-line depreciation, it is essential to first understand how straight-line depreciation works. This method allocates an equal amount of the asset's cost to each year of its useful life. Given an acquisition cost of $150,000 and a useful life of five years, the annual depreciation expense is calculated as follows: 1. **Calculate Annual Depreciation**: \[ \text{Annual Depreciation} = \frac{\text{Acquisition Cost}}{\text{Useful Life}} = \frac{150,000}{5} = 30,000 \] 2. **Depreciation Over Three Years**: To find the total depreciation over three years: \[ \text{Total Depreciation for 3 Years} = 30,000 \times 3 = 90,000 \] 3. **Calculate the Value After Three Years**: The value of the asset after three years is obtained by subtracting the total depreciation from the acquisition cost: \[ \text{Value After 3 Years} = \text{Acquisition Cost} - \text{Total Depreci

To determine the value of the imaging system after three years using straight-line depreciation, it is essential to first understand how straight-line depreciation works. This method allocates an equal amount of the asset's cost to each year of its useful life.

Given an acquisition cost of $150,000 and a useful life of five years, the annual depreciation expense is calculated as follows:

1. Calculate Annual Depreciation:

[

\text{Annual Depreciation} = \frac{\text{Acquisition Cost}}{\text{Useful Life}} = \frac{150,000}{5} = 30,000

]

2. Depreciation Over Three Years:

To find the total depreciation over three years:

[

\text{Total Depreciation for 3 Years} = 30,000 \times 3 = 90,000

]

3. Calculate the Value After Three Years:

The value of the asset after three years is obtained by subtracting the total depreciation from the acquisition cost:

[

\text{Value After 3 Years} = \text{Acquisition Cost} - \text{Total Depreci