Asked by Clara J. Gomez on Jul 11, 2024
Verified
The book value of the machine at the end of year 4 is:
A) $13,750.
B) $55,000.
C) $30,000.
D) $5,000.
E) $0.
Straight-line Method
A technique for distributing the expense of a physical asset uniformly throughout its lifespan.
Salvage Value
An asset's remaining worth estimated at the conclusion of its life of use.
Book Value
Book value is the net value of a company's assets found on its balance sheet, and it is calculated by subtracting liabilities from the total value of assets.
- Enforce the straight-line, double-declining-balance, and units-of-production systems for the depreciation of assets.
- Determine and log the expenditures involved in the procurement and liquidation of plant assets.
Verified Answer
BB
boolby Billion dollars babyJul 16, 2024
Final Answer :
D
Explanation :
The book value at the end of year 4 is the salvage value, as the machine has been fully depreciated over its useful life. The calculation for annual depreciation is (Cost - Salvage Value) / Useful Life = ($60,000 - $5,000) / 4 = $13,750 per year. After 4 years, the total depreciation is $13,750 * 4 = $55,000, leaving a book value of $5,000, which is the salvage value.
Learning Objectives
- Enforce the straight-line, double-declining-balance, and units-of-production systems for the depreciation of assets.
- Determine and log the expenditures involved in the procurement and liquidation of plant assets.
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