Question

The balance in the equipment account is $3,150,000, and the balance in the accumulated depreciation—equipment account is $2,075,000. a. What is the book value of the equipment? $fill in the blank 1 b. Does the balance in the accumulated depreciation account mean that the equipment's loss of value is $2,075,000? , because depreciation is an allocation of the of the equipment to the periods benefiting from its use.

Answer 1

Answer:

A. $1,075,000

B. No

Explanation:

A. Calculation for the book value of the equipment

Using this formula

Book value of the equipment=Equipment account -Accumulated depreciation—equipment account

Let plug in the formula

Book value of the equipment= $3,150,000-$2,075,000

Book value of the equipment=$1,075,000

Therefore the book value of the equipment will be $1,075,000

(b) NO the balance in the accumulated depreciation account does NOT mean that the equipment's loss of value is the amount of $2,075,000.