Flamingo Corporation purchased a machine for $300 000 on 1 January. The estimated life is 10 years. Three years later, what is the book value of the machine reported in the balance sheet as at 31 December, assuming that straight-line depreciation is used and the estimated residual value is zero?
A) $300 000
B) $210 000
C) $120 000
D) $60 000

Question

Quizplus · Accepted Answer

The machine's annual depreciation is $300,000 / 10 years = $30,000. After 3 years, the accumulated depreciation is $30,000 * 3 = $90,000. The book value after 3 years is $300,000 - $90,000 = $210,000.

Flamingo Corporation Purchased a Machine for $300 000 on 1