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alexandr1967 [171]
4 years ago
13

Archie Co. purchased a framing machine for $45,000 on January 1, 2021. The machine is expected to have a four-year life, with a

residual value of $5,000 at the end of four years. Using the straight-line method, depreciation for 2021 and book value at December 31, 2021, would be:
Business
1 answer:
dimulka [17.4K]4 years ago
6 0

Answer:

Depreciation 2021 = $10,000

Book Value 2021 = $35,000

Explanation:

Straight Line method charges a fixed amount of depreciation during the use of an asset.

Depreciation Charge = (Cost - Residual Value) ÷ Estimated Useful Life                

Therefore,

Depreciation 2021 = ($45,000 - $5,000) ÷ 4

                               = $10,000

Book Value = Cost - Accumulated Depreciation to date

Therefore,

Book Value 2021 = $45,000 - $10,000

                             = $35,000

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