Question

Please do it by type not pics. Cost of equipment .   $       469,000 Estimated service life...

Please do it by type not pics.

Cost of equipment .   $       469,000

Estimated service life in years 12

Salvage value $         40,000

1.Calculate the book value of the equipment at the end of year 2 month 3 using the following information assuming the straight-line method and that depreciation is accrued for monthly.

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Homework Answers

Answer #1

Computation of book value of the equipment

Given:

Cost of equipment=$469000

Salvage value =$ 40000

Useful life =12years

Formula for depression under straight line method:

Depreciation= equipment cost - scrap value/useful life

Depreciation in monthly basis= depreciation /12months

Depreciation=$469000-$40000/12years

=$35750 yearly

Depreciation monthly=$35750/12months

=$2979 per month

Book value of equipment

at the end of first month =$469000-$2979

= $466021

Book value of equipment

at the end of 2nd month. =$466021-$2979

= $463042

Book value of equipment

at the end of 3rd month =$463042-$2979

=$460063

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