Goodson Healthcare purchased a new sonogram imaging unit for $300,000 and a truc

Question

Goodson Healthcare purchased a new sonogram imaging unit for $300,000 and a truck body and chassis for an additional $100,000 to make the unit mobile. The unit-truck system will be depreciated as one asset. The functional life is 8 years, and the salvage is estimated to be 9% of the purchase price of the imaging unit regardless of the number of years of service. Use classical Straight Line depreciation to determine the salvage value, annual depreciation, and book value after 4 years of service. The salvage value is determined to be $ The annual depreciation is determined to be $ The book value is determined to be $

Explanation / Answer

Salvage value = .09*300000

= $27000

The annual depreciation = (purchase price of unit truck system - salvage value)/ Useful life

= (300000 + 100000) - 27000)/8

= (400000 - 27000)/8

= $ 46625

Book value after 4 years = Purchase price - annual depreciation*4

= 400000 - 46625*4

= $213500

After 4 years, the book value will be $213500

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.