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spin [16.1K]
3 years ago
10

Viva, Inc. bought machine X for $18,000 two years ago. The machine had no residual value and had an estimated useful life of 10

years. If the company uses the straight-line depreciation method, calculate the current book value of the machine.
Business
1 answer:
FinnZ [79.3K]3 years ago
4 0

Answer:

$14,400

Explanation:

The computation of the current book value of the machine is shown below:-

Value of the Machine two Years ago = $ 18,000

Annual Depreciation = Cost - Salvage Value ÷ Useful Life

= ($18,000 - 0) ÷ 10

= $ 1,800  

Depreciation for two years = $1,800 × 2

= $ 3,600  

The Current Book Value = Cost - Depreciation for two years

= $18,000 - $3,600

= $14,400

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Reference: Tuovila, Alicia. “Accumulated Depreciation Definition.” Investopedia, Investopedia, 18 Oct. 2019

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