Question

Marigold Corporation bought equipment on January 1, 2021. The equipment cost $348000 and had an expected salvage value of $59100. The life of the equipment was estimated to be 6 years. Assuming straight-line deprecation, the book value of the equipment at the beginning of the third year would be:

Answer 1

Answer:

Book Value At the begining of the third year= 251,700

Explanation:

$\frac{Adquisition Value - SalvageValue}{YearsOfUsefulLife} = Depreciation per Year$

348,000- 59,100 = 288,900 = amount subject to depreciation

288,900/6 = 48,150 depreication per year

At the beginning of the third year the equipment will have 2 depreciation

(end of first year and end of second year)

accumulated depreciation = 48,150 * 2 = 96,300

Book Value = Adquisition Value - Accumulated depreciation

Book Value = 348,000 - 96,300 = 251,700