Orangewood Industries bought a new cash register for $7,500.Orangewood originally planned to use the cash register for 4 years and then sell it for $600.After 4 years,Orangewood had recorded $6,900 of depreciation.If the company continues to use the cash register,still planning to sell it eventually for $600,then Orangewood should record:
A)no additional depreciation.
B)$600 of additional depreciation.
C)$1,725 of additional depreciation.
D)the removal of the cash register from its books because it is fully depreciated.

Question

Quizplus · Accepted Answer

The asset should not be depreciated below its residual value.Since this asset's book value is $600,then no additional depreciation should be recorded.The asset should not be removed from the company's books until it is actually disposed of.

Orangewood Industries Bought a New Cash Register for $7,500