Final answer:
Using the straight-line depreciation method, the annual depreciation expense was calculated as $6,805. The book value of the equipment at December 31, 2018, is $69,195 after subtracting one year's depreciation from the cost.
Step-by-step explanation:
To calculate the book value of the equipment at the end of the first year using the straight-line depreciation method, we need to subtract one year's worth of depreciation from the initial cost of the equipment.
First, we determine the annual depreciation expense by deducting the residual value from the cost of the equipment and then dividing by the asset's useful life:
Annual Depreciation Expense = (Cost - Residual Value) / Useful Life
Annual Depreciation Expense = ($76,000 - $7,950) / 10 years = $6,805 per year
Next, we subtract one year's depreciation from the cost to determine the book value at the end of the first year:
Book Value at December 31, 2018 = Cost - Annual Depreciation Expense
Book Value at December 31, 2018 = $76,000 - $6,805 = $69,195
Therefore, the final answer is d. $69,195.