Answer:
B) Report the book value of the equipment in its December 31,2018 balance sheet at $210,000.
Explanation:
Accumulated Depreciation = $40,000 x 3 = $120,000
Salvage Value = $0
Book Value = Cost - Accumulated Depreciation
= $400,000 - $120,000 = $280,000
Useful Life = 7 - 3 = 4 Years
Revised Annual Depreciation = (Book Value - Salvage Value) / Useful Life
= ($280,000 - $0) / 4
= $70,000
Mobic Inc.
Balance Sheet as of December 31, 2018
Fixed Assets: $ $
Equipment 280,000
Less: Accumulated Depreciation (70,000)
Book Value of Equipment 210,000
So the correct answer will be;
B) Report the book value of the equipment in its December 31,2018 balance sheet at $210,000.