Question

Calculation Arizona Teak Company paid RM54,000 for computers. These computers have an estimated uselife of 3...

Calculation

Arizona Teak Company paid RM54,000 for computers. These computers have an estimated uselife of 3 years. The straight line depreciation method is used. After one year of use, what will be the book value of the computers.

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Answer #1

Cost of computer = RM54,000

Estimated useful life = 3 years

Straight line depreciation = cost of the assets / useful life

Straight line depreciation = 54,000 / 3 = RM18,000

Under straight line depreciation method the depreciation amount is equal in all year .

The book value of assets after one year

= beginning book value - depreciation

The book value of computer after one year

= 54,000 - 18,000 = RM36,000

The book value of computer after one year is RM36,000.

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