Spencer Company purchased a tractor at a cost of $360,000 on January 1, 2019. The tractor has an estimated salvage value of $60,000 and an estimated life of 8 years.
If Spencer uses the straight-line method, what is the book value at January 1, 2023?

Question

Quizplus · Accepted Answer

Accumulated depreciation = [($360,000 - $60,000) / 8] × 4 = $150,000
Book value = $360,000 - $150,000 = $210,000

Spencer Company Purchased a Tractor at a Cost of $360,000