A Company Purchased New Furniture at a Cost of $16,000

Multiple Choice

A company purchased new furniture at a cost of $16,000 on January 1. The furniture is estimated to have a useful life of 6 years and a $1,000 salvage value. The company uses the straight-line method of depreciation. What is the book value of the furniture on December 31 of the first year?

A) $16,000
B) $15,000
C) $2,500
D) $13,500
E) $13,333$16,000 - $2,500 = $13,500