Grogle Company had to calculate book value on its die cutting machine.The company paid $32,000 for the equipment on January 1,2012,but its current appraised value is $46,000.On December 31,2015,accumulated depreciation on the machine is $12,000.What is Grogle Company's book value on the die cutting machine at December 31,2015?
A)$14,000
B)$32,000
C)$46,000
D)$20,000
E)$34,000

Question

Quizplus · Accepted Answer

Book value of an asset is calculated as its original cost minus the accumulated depreciation.

Original cost of the equipment = $32,000
Accumulated depreciation as of December 31, 2015 = $12,000
Therefore, the book value on the die cutting machine at December 31, 2015 will be:

Book value = Original cost - Accumulated depreciation
Book value = $32,000 - $12,000
Book value = $20,000

Hence, option D is the correct answer.

Grogle Company Had to Calculate Book Value on Its Die