Office furniture was purchased for $57,000. It had an estimated residual value of $7,000 and has a current carrying value of $9,000. Its depreciable cost must have been

Question

Quizplus · Accepted Answer

Depreciable cost = Purchase cost - Residual value
Depreciable cost = $57,000 - $7,000
Depreciable cost = $50,000
Since the current carrying value is higher than the residual value, it means that some depreciation has already been taken, but we do not know how much. Therefore, the original depreciable cost must have been $50,000.

Office Furniture Was Purchased for $57,000