A company that manufactures pulse doppler insertion flow meters uses the straight line method for book depreciation purposes. Newly-acquired equipment has a first cost of $170,000 with a 3-year life and $20,000 salvage value. Determine the depreciation charge and book value for year 2.
What will be an ideal response?
Depreciation charge is the same each year
D = (170,000 – 20,000)/3 = $50,000
BV2 = 170,000 – 2(50,000) = $70,000
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What will be an ideal response?
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