Mali Corporation uses the cost model to account for its property, plant and equipment, which were acquired on January 1, 2017 for $175,000.Mali uses straight-line depreciation and estimates the assets will have a ten year life with no residual value.Assuming Mali did not experience any impairment losses, the December 31, 2018 net book value of the assets is

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Since the company uses the cost model, we have to depreciate the asset every year by $175,000/10 = $17,500. After two years, the accumulated depreciation will be $17,500 x 2 = $35,000. Therefore, the net book value of the asset will be $175,000 - $35,000 = $140,000.

Mali Corporation Uses the Cost Model to Account for Its