Question

The original cost of a piece of equipment was $100,000. The equipment was depreciated using the straight-line method with annual depreciation of $20,000. After two years, the fair value of the equipment is $82,000. How much is the book value of the equipment at the end of the second year?.

Answer 1

The book value of the equipment at the end of the second year is $60,000.

Step-by-step explanation:

The book value of the equipment at the end of the second year can be calculated by subtracting the accumulated depreciation from the original cost.

Accumulated depreciation after two years: $20,000 x 2 = $40,000

Book value = Original cost - Accumulated depreciation = $100,000 - $40,000 = $60,000

Therefore, the book value of the equipment at the end of the second year is $60,000.