On January 1,Year 1,Alabama Company purchased a machine for $26,000.The machine has an estimated useful life of 4 years and an estimated salvage value of $6,000.What is the book value of the machine reported on Alabama's balance sheet as of December 31,Year 1?

Question

Quizplus · Accepted Answer

Accumulated depreciation at end of Year 1 = (Cost of $26,000 - Salvage value of $6,000)÷ 4 years = $5,000
Book value = Cost of $26,000 cost - Accumulated depreciation of $5,000 = $21,000

On January 1,Year 1,Alabama Company Purchased a Machine for $26,000