On January 1, 2019, ABC, Inc. purchased equipment for $64,000. The equipment had an estimated useful...
On January 1, 2019, ABC, Inc. purchased equipment for $64,000. The equipment had an estimated useful life of 8 years and an estimated salvage value of $3,160. Assume the company employs the sum-of-the-years-digits' method of depreciation. Calculate the book value of the equipment at December 31, 2022.
Homework Answers
Answer
- Working
|
A |
Cost |
$ 64,000.00 |
|
B |
Residual Value |
$ 3,160.00 |
|
C=A - B |
Depreciable base |
$ 60,840.00 |
|
1+2+3+4+5+6+7+8 |
Sum of digits |
36 |
|
Year |
Depreciable base |
Formula |
Depreciation expense |
Accumulated Depreciation |
Ending Book Value |
|
2019 |
$ 60,840.00 |
[60840 x 8/36] |
$ 13,520.00 |
$ 13,520.00 |
$ 50,480.00 |
|
2020 |
$ 60,840.00 |
[60840 x 7/36] |
$ 11,830.00 |
$ 25,350.00 |
$ 38,650.00 |
|
2021 |
$ 60,840.00 |
[60840 x 6/36] |
$ 10,140.00 |
$ 35,490.00 |
$ 28,510.00 |
|
2022 |
$ 60,840.00 |
[60840 x 5/36] |
$ 8,450.00 |
$ 43,940.00 |
$ 20,060.00 |
- Book Value at Dec 31, 2022 = $ 20,060 Answer
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On January 1, 2019, ABC, Inc. purchased equipment for $64,000. The equipment had an
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