A company purchased equipment valued at $825,000 on January 1.The equipment has an estimated useful life of seven years or six million units.The equipment is estimated to have a salvage value of $35,000.Assuming the straight-line method of depreciation,what is the book value at the end of the second year if .5 million units were produced?

Question

Quizplus · Accepted Answer

(825,000-35,000)/7 = 112,857.14 X2 = 225,714.28 (Accumulated Deprec.)
BV: Cost 825,000-225,714.28 = $599,285.72

A Company Purchased Equipment Valued at $825,000 on January 1