Caricature's Inc

Multiple Choice

Caricature's Inc.bought new computers on January 1 for $18,000 to improve the quality of their animation.The computers have a useful life of 8 years but Caricature's Inc.thinks that continuing technology developments will likely mean they will replace the computers after 4 years, at which time they will be worth $2,000.If they use straight-line amortization the amortization expense for the first year will be:

A) $2,000
B) $2,250
C) $4,000
D) $4,500