A special-purpose digitizing system just acquired by Bzybee Consultants has B = $50,000 and a 4?year recovery period. (a) What is the accumulated depreciation after year 3 if the salvage value of the system is $5000? (b) What is the total amount of depreciation remaining?
What will be an ideal response?
(a) D = (50,000 – 5000)/4 = $11,250
Accumulated depreciation = 11,250(3) = $33,750
(b) Depreciation remaining = BV3 – S
BV3 = 50,000 – 3(11,250) = $16,250
Depreciation remaining = 16,250 – 5000 = $11,250
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