Leaping Deer Company purchased a tractor at a cost of $240,000 on January 1, 2015. The tractor has an estimated residual value of $40,000 and an estimated life of 8 years.
If Leaping Deer uses the straight-line method, what is the book value at January 1, 2019?
A) $ 40,000
B) $140,000
C) $160,000
D) Some other answer

Question

Quizplus · Accepted Answer

Rationale:
Accumulated depreciation = [($240,000 - $40,000) / 8] × 4 = $100,000
Book value = $240,000 ? $100,000 = $140,000

Leaping Deer Company Purchased a Tractor at a Cost of $240,000