On January 1,2015,Arizona Company acquired a machine for $33,000.Annual depreciation expense equals $3,000.The residual value of the machine is $3,000.What is the book value of the machine on December 31,2016?

Question

Quizplus · Accepted Answer

The annual depreciation for the machine is $3,000. Therefore, the accumulated depreciation for the machine by December 31, 2016, would be $6,000 ($3,000 from 2015 and $3,000 from 2016).
Book value = Cost of Asset - Accumulated Depreciation
Book value = $33,000 - $6,000
Book value = $27,000

On January 1,2015,Arizona Company Acquired a Machine for $33,000