Global Enterprises purchased a machine on January 1,2020 for $22,500.The machine had an estimated useful life of 10 years and an estimated residual value of $2,500.Assuming Global uses straight-line depreciation,what would be the book value of the machine on December 31,2024?
A)$ 0
B)$10,000
C)$11,250
D)$12,500

Question

Quizplus · Accepted Answer

The annual depreciation is ($22,500 - $2,500) / 10 = $2,000. After 5 years, depreciation is 5 * $2,000 = $10,000. The book value is $22,500 - $10,000 = $12,500.

Global Enterprises Purchased a Machine on January 1,2020 for $22,500