On January 1, 2016, Martini, Inc acquired a machine for $1,050,000
The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $100,000. What is the book value of the machine at the end of 2017 if the company uses the straight-line method of depreciation?
A) $630,000
B) $670,000
C) $570,000
D) $629,996
B .Straight-line depreciation = (Cost - Residual value) / Useful life
Depreciation as per the straight-line method = ($1,050,000 - $100,000 ) / 5 = $190,000
Book value of the asset at the end of 2017 = $1,050,000 - $190,000 - $190,000 = $670,000.
You might also like to view...
What is the effect on the accounting equation when a company recognizes rent as earned that had previously been received in advance from customers?
a. Expenses increase b. Revenues decrease c. Liabilities increase d. Net income increases
A zero coupon bond provides for _____ periodic payments of interest while the bond is outstanding; and the bond requires payment of all _____ at maturity
a. six month; principal b. no; principal and interest c. annual; principal d. monthly; principal e. none of the above
The BEST graphic device to represent the sales of DVR devices over the last five years, with proportionate sales reflected for four age categories each year would be a
a. segmented bar chart. b. table. c. line chart. d. horizontal bar chart.
Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets, which Ewing still possesses. Ewing's lien on the sets will terminate
A. if Ewing continues to maintain possession. B. if Ewing does not file a written notice of lien within thirty days. C. if Ewing voluntarily surrenders possession. D. within thirty days.