Question

A building was purchased for $67,000. The asset has an expected useful life of eight years and depreciation expense each year is $6,000 using the straight-line method. What is the residual value of the building

Answer 1

The residual value of the building is $19000

Step-by-step explanation:

depreciation expense=cost-residual value/useful life

cost is $67,000

useful life is 8 years

residual value is unknown

$6000=$67,000-x/8 years

$6000* 8 years=$67,000-x

$48,000=$67,000-x

x=$67,000-$48,000$

x=$19,0000

The residual value of the asset is $19,000