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ABC purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation
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ABC purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2019 and the book value at December 31, 2019 would be:

User Stbrody
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14 votes
14 votes

Answer:

Depreciation expense - 2019 = $11,000

Book Value - 2019 = $38,000

Step-by-step explanation:

Straight Line method charges a fixed depreciation charge as :

Depreciation Expense = (Cost - Residual Value) รท Useful Life

therefore,

Depreciation expense = $11,000

Book Value = $60,000 - $11,000 - $11,000 = $38,000

User MrEricSir
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