1.method and has an estimated service life of 7 years. After three years of use, the book value of the furniture will be:

Question

Quizplus · Accepted Answer

The book value after three years can be calculated using straight-line depreciation. If the furniture has a service life of 7 years, it depreciates by 1/7 of its initial value each year. After three years, it will have depreciated by 3/7 of its initial value. If the initial value is $105,000, then the depreciation is $45,000 (3/7 of $105,000), leaving a book value of $60,000.

1Method and Has an Estimated Service Life of 7 Years