HG Enterprises paid $105,000 for office furniture. The furniture is depreciated using the straight-line 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 annual depreciation expense can be calculated as $105,000 / 7 = $15,000 per year. After three years of use, the accumulated depreciation will be $15,000 * 3 = $45,000. Therefore, the book value will be $105,000 - $45,000 = $60,000.

HG Enterprises Paid $105,000 for Office Furniture