Ivorycoast,Inc.purchased a van on January 1,2017,for $890,000.Estimated life of the van was five years,and its estimated residual value was $98,000.Ivorycoast uses the straight-line method of depreciation.Calculate the book value of the van at the end of 2017.

Question

Quizplus · Accepted Answer

D)Depreciation per year = (Cost - Residual value)/ Useful life
Depreciation per year = ($890,000 - $98,000)/ 5 = $158,400
Book value at the end of first year = $890,000 - $158,400 = $731,600