Question

Tweedie Company reported the following in the long-term asset section of its balance sheet;

Equipment, net of depreciation of $120,000 and $100,000, respectively	Year 2 $167,500	Year 1 $187,500
Patent, net of amortization of $31,500 and $27,000, respectively	88,000	92,500

The company uses the straight-line method to depreciate and amortize all of its operating assets. No new long-term assets were acquired nor sold during the year.

As of December 31, Year 2, approximately how old is the equipment in years?

A) 2 years
B) 18 years
C) 6 years
D) 11 years

Answer 1