Question

Question 11 2 pts Office furniture costs $50,000 and has a salvage value of $500 at the end of a 10-year depreciable life. Compute the depreciation charge and book value at the end of 10 years using straight line depreciation. 4950 4500 Cannnt he determined

Answer 1

Asset Value Co Cs Time (yr) 0 10

$\mathbf{Initial\, Asset \,(furniture) \,value\,( Co) =\$ 50000}$

$\mathbf{Salvage \,Value (C_s) = \$ 500}$

$\mathbf{Asset \,Life \,(n)= 10\, yr}$

$\mathbf{Now \,By \,Straight \,Line \,Depreciation \,Method\,,We \,have}$

$\mathbf{Depreciation \,Per \,Year \,(D)\,=\frac{C_o-C_s}{n}}$

$\mathbf{Depreciation \,Per \,Year \,(D)\,=\frac{50000-500}{10}=\$\,4950\,per\,year}$

$\mathbf{Given \,At \,the \,end \,of \,10 \,year, \,time \,(t) = \,10\,yr}$

$\mathbf{Depreciation \,Charge (C_D)_{10}= D*time=4950*10=\$49500}$

$\mathbf{Book Value (C_B) = Initial Value - Depreciation\,Charge}$

$\mathbf{Hence \,Book \,Value \,at \,the \,end \,of \,10 \,year \,(C_B)_{10}= C_o-(C_D)_{10}}$

$\mathbf{(C_B)_{10}= 50000-49500=\$500}$

Options Of your question are very much confusing, because of the following points

1) I think , In the given image all options are not listed .

2) Two things are asked in the question while all options contain only one value .

3) Visible Options are not even in range of the answer calculated.

Hence Please Be careful while choosing any of the Option,Because i am 110 % sure for my solution .

As Much Options i can see , from there i think that due to any error these options may have been given of Depreciation Per year ( ie 4950 option A correct option ) , Because this is only option which is in the range of the parameters calculated in the solution. However This parameter is not asked in the question it is just a guess.

My second Guess is that May be any of the given value in the question is written wrong , so try it to solve by same method and correct value if you have the correct one.

For any query further, Please Feel free to ask me in the comment section below .... i will be much happy to help you ....and please dont forget to like.

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