Answer:
Book value= $260,000
Explanation:
<u>First, we need to calculate the annual depreciation using the following formula:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (360,000 - 60,000) / 6
Annual depreciation= $50,000
<u>Now, at the beginning of the third year, the asset accumulated depreciation two times.</u>
Accumulated depreciation= 50,000*2 = 100,000
<u>Finally, the book value:</u>
<u></u>
Book value= purchase price - accumulated depreciation
Book value= 360,000 - 100,000
Book value= $260,000