Maxine,Inc.bought a machine on January 1,2012 for $48,000.The machine is expected to last for 8 years,after which it will be worthless.What is the book value of the machine on Maxine's balance sheet at December 31,2012?

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Quizplus · Accepted Answer

Assuming straight-line depreciation, the annual depreciation expense would be $48,000/8 = $6,000. At the end of the first year, the accumulated depreciation would be $6,000. Therefore, the book value (cost - accumulated depreciation) on December 31, 2012 would be $48,000 - $6,000 = $42,000.