On January 1 2016 Pulque Company purchased equipment for $51000. The company is depreciating the equipment at the rate of $850 per month. The book value of the equipment at December 31 2016 is

Question

Quizplus · Accepted Answer

To find the book value of the equipment we need to subtract the accumulated depreciation from the original cost of the equipment.

The equipment was purchased for $51,000 on January 1 2016.

Depreciation per month = $850
Depreciation for the year = $850 * 12 = $10,200

Accumulated depreciation for the year ending December 31 2016 = $10,200

Book value of the equipment as of December 31 2016 = 
$51,000 - $10,200 = $40,800

On January 1 2016 Pulque Company Purchased Equipment for $51000