Solve the problem.
-A drill press cost $5,000 and has an estimated life of 8 years and a scrap value of $300. Find the
Book value at the end of 6 years using the straight-line method. Round to nearest dollar.

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation as (Cost - Scrap Value) / Useful Life. For the drill press: ($5,000 - $300) / 8 = $587.50 per year. After 6 years, depreciation is 6 * $587.50 = $3,525. The book value is $5,000 - $3,525 = $1,475.

Solve the Problem. -A Drill Press Cost $5,000 and Has an Estimated Life