Answer:
Book value 2020= $18,000
Explanation:
Giving the following information:
Purchasing price= $55,000
Residual value= $5,000
Useful life= 5 years
First, we need to determine the depreciation expense for 2018 and 2019. We will use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2018= 2*[(55,000 - 5,000)/5]= 20,000
2019= 2*[(50,000 - 20,000)/5]= 12,000
Book value 2020= 30,000 - 12,000
Book value 2020= $18,000
