Ivorycoast,Inc.purchased a van on January 1,2017,for $880,000.Estimated life of the van was five years,and its estimated residual value was $101,000.Ivorycoast uses the straight-line method of depreciation.Calculate the book value of the van at the end of 2017.

Question

Quizplus · Accepted Answer

Depreciation per year = (Cost - Residual value)/ Useful life
Depreciation per year = ($880,000 - $101,000)/ 5 = $155,800
Book value at the end of first year = $880,000 - $155,800 = $724,200