Smithville Company purchased machinery four years ago for $24,000.Smithville estimates that the machinery will have a total useful life of six years.What amount will Smithville include in total assets for machinery?

Question

Quizplus · Accepted Answer

The machinery was purchased for $24,000 and has a total useful life of six years. This means it depreciates $4,000 per year ($24,000 / 6 years). After four years, it would have depreciated $16,000 ($4,000 * 4 years), leaving a remaining value of $8,000 ($24,000 - $16,000). This remaining value is what will be included in total assets for machinery.

Smithville Company Purchased Machinery Four Years Ago for $24,000