Question

Ace Electronics bought a new cash register for $2,500. Ace originally planned to use the cash register for 4 years and then sell it for $200. After 4 years, Ace had recorded $2,300 of depreciation. If Ace continues to use the cash register, still planning to sell it eventually for $200, then Ace should record ______.\

Answer 1

If he continues to use the cash register and plans to sell it eventually for $200, then Ace should record nothing because their is no additional depreciation

Here, the formula to derive total value to be depreciated is Cost - Scrap Value.

Total Value to be depreciated = $2500 - $200

Total Value to be depreciated = $2,300

Therefore, the amount of $2,300 is fully depreciated.

So, the remaining $200 is the scrap value which will be realized from the sale

Hence, there will be no need to charge any further depreciation.

Therefore, If he continues to use the cash register and plans to sell it eventually for $200, then Ace should record nothing because their is no additional depreciation.

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