Tracy,Inc. Tracy,Inc.adjusts its books each month but closes its books at the end of the year.The trial balance at July 31 before adjustments is as follows:
Refer to the trial balance of Tracy,Inc.
If the equipment had an estimated useful life of five years,what is its book value at July 31,after the proper July adjustment is recorded?

Question

Tracy,Inc. Tracy,Inc.adjusts its books each month but closes its books at the end of the year.The trial balance at July 31 before adjustments is as follows:
 Refer to the trial balance of Tracy,Inc.
If the equipment had an estimated useful life of five years,what is its book value at July 31,after the proper July adjustment is recorded?

Quizplus · Accepted Answer

To find the book value of equipment, we need to calculate its accumulated depreciation. The July adjustment record states that the monthly depreciation for equipment is $429 ($5148 / 12).

Accumulated depreciation as of July 31 = $429 * 6 months = $2574.

Book value of equipment as of July 31 = Cost of equipment - Accumulated depreciation 
= $17,741 - $2574 = $15,167.

Therefore, the correct answer is C.

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