Peavey Enterprises purchased a depreciable asset for $24,500 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,500, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? a. $15,125.b. $4,583.c. $22,000.d. $18,333.e. $5,500.

The amount of accumulated depreciation on this asset on December 31, Year 3 is a. $15,125.

Depreciable Value = $24,500-$2500

Depreciable Value = $22,000

Per Year depreciation = $22000/4

Per Year depreciation= $5500

Depreciation for year 1 = $5500 x 9/12

Depreciation for year 1  = $4125

Depreciation for year 2 = $5500

Depreciation for year 3 = $5500

Accumulated depreciation on 31st December year 3 = $4125+$5500+$5500  

Accumulated depreciation on 31st December year 3= $15,125

Inconclusion the amount of accumulated depreciation on this asset on December 31, Year 3 is a. $15,125.

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a. $15,125

Explanation:

The computation of the accumulated depreciation is shown below:

The formula i.e. be used for the yearly depreciation expense using the straight-line method is shown below:

= (Original cost - residual value) ÷ (useful life)  

For the first year

= ($24,500 - $2,500) ÷ (4 years)  

= ($22,000) ÷ (4 years)  

= $5,500

The 9 months depreciation is $4,125

For the second year

= ($24,500 - $2,500) ÷ (4 years)  

= ($22,000) ÷ (4 years)  

= $5,500

For the third year

= ($24,500 - $2,500) ÷ (4 years)  

= ($22,000) ÷ (4 years)  

= $5,500

Now the accumulated depreciation is

= $4,125 + $5,500 + $5,500

= $15,125