Answer:
machine's book value at the end of its second year = $13550
the amount of depreciation for each of the final three years = $3833.33
Step-by-step explanation:
machine costing $24,600
4 year salvage value = $2,500
3 year salvage value = $2,050
to find out
machine's book value at the end of its second year and the amount of depreciation for each of the final three years
solution
first w calculate depreciate basis = machine costing - 4 year salvage value
depreciate basis = $24600 - $2500 = $22100
and depreciate = $22100 / 4 = $5525 per year
so after 2 year depreciate value is 2 × $5525 = $11050
now we can say machine's book value at the end of its second year = machine costing - after 2 year depreciate value
machine's book value at the end of its second year = $24,600 - $11050
machine's book value at the end of its second year = $13550
and the amount of depreciation for each of the final three years = ( book value - salvage value ) / 3
the amount of depreciation for each of the final three years = ( $13550 - $2,050 ) / 3
the amount of depreciation for each of the final three years = $3833.33
