Question

HG Enterprises paid $108,000 for office furniture. Depreciation on the office furniture is estimated to be $21,600 per year. After three years of use, the book value of the furniture will be:

Select one:
a. $64,800.
b. $108,000.
c. $43,200.
d. $21,600.

Answer 1

To calculate the book value of the office furniture after three years, subtract the accumulated depreciation from the original cost: $108,000 - $64,800 = $43,200.

Step-by-step explanation:

To calculate the book value of the office furniture after three years, we need to subtract the accumulated depreciation from the original cost of the furniture. Since the depreciation on the furniture is $21,600 per year, after three years the accumulated depreciation would be $21,600 x 3 = $64,800.

To find the book value, subtract the accumulated depreciation from the original cost: $108,000 - $64,800 = $43,200.

Therefore, the book value of the office furniture after three years will be $43,200.