es your bookmarks hre on the bookmarks bar Import bookmarks now Chapters 1011& 1
ID: 1115596 • Letter: E
Question
es your bookmarks hre on the bookmarks bar Import bookmarks now Chapters 1011& 12 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 mobille. The unit-truck system will be depreclated 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 depreclation to determine the salvage value, annual depreclation, and book value after 3 years of service. The salvage value is determined to be $ The annual depreciation is determined to be $ The book value is determined to be $ 20 10 3 0 0Explanation / Answer
Salvage value = (Price of the imaging unit + additions made) * percentage of price expected
= (300,000 + 100,000) * 9/100
= 400,000 * 9/100 = 36,000
Annual Depreciation = (Original Price - Salvage Price)/ No. of years
= 400,000 - 36000 / 8
= 45,500
Depreciation Value after 3 years = Per year depreciation * no. of years = 45,500 * 3 = 136,500
Book Value = Value after 3 years = 400,000 - 136,500 (depreciation) = 263,500
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