Answer:
Book value of the asset = $484,000
Explanation:
Given:
Equipment cost = $800,000
Residual value = $10,000
Computation:
Depreciation = (Equipment cost - Residual value) / Life
Depreciation = ($800,000 - $ 10,000) / 5
Depreciation = $ 158,000 per year
Depreciation for 2 year =$ 158,000 x 2
Depreciation for 2 year = $316,000
Book value of the asset = Equipment cost - Depreciation for 2 year
Book value of the asset = $800,000 - $316,000
Book value of the asset = $484,000
