QUESTION 17
Pizzicletta Pizza Shop purchased a stone pizza oven on January 1, 2018. The oven cost $50,000 and has an estimated salvage value of $10,000. Using
the straight-line method of depreciation, annual depreciation expense is computed as $8,000. What is the balance in the Accumulated Depreciation account
at the end of 2020 (end of year 3)?
O A. $26.000
O B. $8,000
O C. $16.000
O D. $24.000

O D. $24.000

Explanation:

Under the straight-line depreciation method, the depreciation amount is a  constant figure throughout the life of an asset. It means that every year, the amount charged as depreciation is the same throughout the life of the asset.

For the stone pizza, the depreciation per year is $8000. In three years, the amount of accumulated depreciation will be $8000 multiplied by three years.

=$8000 x 3 years

=$24,000

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