Status Corporation purchased for $350,000 a new numerical controller during the last month of 2012. Extra...
Status Corporation purchased for $350,000 a new numerical controller during the last month of 2012. Extra installation costs were $40,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Status sold the system at the end of 2015 for $45,000. State the numerical values for the following: remaining life at sale time, market value in 2015, book value at sale time if 65% of the unadjusted basis had been depreciated.
Question 13 options:
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Remaining life = 7 years Market value = $305,000 Book value = $35,000 |
|
|
Remaining life = 3 years Market value = $310,000 Book value = $45,000 |
|
|
Remaining life = 4 years Market value = $45,000 Book value = $136,500 |
|
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Remaining life = 4 years Market value = $40,000 Book value = $253,500 |
Homework Answers
Original Useful life of numerical controller = 7 years
It was purchased in the last month of 2012 and sold at the end of 2015. Thus, it was used for 3 years.
Remaining life of numerical controller = 7 - 3
= 4 years
Status sold the system at the end of 2015 for $45,000.
Thus, market value = $45,000
Book value = Cost price - Accumulated depreciation
= 390,000 - 390,000 x 65%
= 390,000 - 253,500
= $136,500
Correct option is (c)
Kindly comment if you need further assistance. Thanks
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