Cutter Enterprises purchased equipment for $72,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $6,000.
-Using the sum-of-the-years'-digits method, depreciation for 2018 and book value at December 31, 2018, would be:

Question

Cutter Enterprises purchased equipment for $72,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $6,000. 
-Using the sum-of-the-years'-digits method, depreciation for 2018 and book value at December 31, 2018, would be:

Quizplus · Accepted Answer

Depreciation, 2018 = ($72,000 - 6,000) × 5/15 = $22,000
Book value, 12/31/2018 = $72,000 - 22,000 = $50,000

Cutter Enterprises Purchased Equipment for $72,000 on January 1, 2018