You sold an automobile at a price of $14,000.The automobile was purchased three years ago for$20,000. The car had been depreciated accordingto a five-year MACRS property class, and the bookvalue was $5,760. What is the amount of economicdepreciation?

You sold an automobile at a price of $14,000.The automobile was purchased three years ago for$20,000. The car had been depreciated accordingto a five-year MACRS property class, and the bookvalue was $5,760. What is the amount of economicdepreciation?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

You sold an automobile at a price of $14,000.
The automobile was purchased three years ago for
$20,000. The car had been depreciated according
to a five-year MACRS property class, and the book
value was $5,760. What is the amount of economic
depreciation?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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