Answer:
depreciation expense accumulated deprecation book value
$5,000 $5,000 $20,000
$5,000 $10,000 $15,000
$5,000 $15,000 $10,000
$5,000 $20,000 $ 5000
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($25,000 - $5000) / 4 = $5,000
Book value in year in subsequent years = previous book value - that year's depreciation expense
Year 1's book value = $25,000 - $5000 = $20,000
Year 2's book value = $20,000 - $5000 = $15,000
Year 1's book value = $15,000 - $5000 = 10,000
Year 1's book value = $10,000 - $5,000 = $5,000
Accumulated depreciation is sum of depreciation expense
Year 1 = 5,000
year 2 = 5000 x 2 = 10,000
year 3 = 5000 x 3 = 15,000
year 4 = 5000 x 4 = 20,000
