Question

Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the straight-line method, the book value at December 31, 2021, would be:

Answer 1

Answer:

$49,000

Explanation:

Book value = Cost of asset - deprecation expense

Deprecation expense using the straight line depreciation method = (Cost of asset - Salvage value) / useful life

($60,000 - $5,000) / 5 = $11,000

Book value = $60,000 - $11,000 = $49,000

I hope my answer helps you

Answer 2

Based on the purchase value of the equipment and the straight-line method, the book value would be $49,000.

What would be the book value on December 2021?

First find the depreciation:

= (60,000 - 5,000) / 5

= $11,000

The book value will be:
= Purchase price - depreciation

= 60,000 - 11,000

= $49,000

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