On January 1, 2004, ABC Company purchased equipment for $98,000. The equipment w
ID: 2450990 • Letter: O
Question
On January 1, 2004, ABC Company purchased equipment for $98,000. The equipment was assigned a life of 12 years
and a residual value of $14,000.
On January 1, 2009, ABC Company decided the life of the equipment should be revised from 12 to 15 years.
On January 1, 2014, ABC Company spent $50,000 to completely overhaul the equipment. This overhaul caused ABC
Company to change the life of the equipment from 15 years to 19 years with a residual value at the end of the 19
years of $3,000.
Calculate the book value of the equipment at December 31, 2015 assuming ABC Company employs thestraight
line depreciation method. Do not use decimals in your answer.
Explanation / Answer
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Value of Asset 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 WDV 12 Year 148000 12333 12333 12333 12333 12333 12333 WDV 15 Year 77,000.00 7700 7700 7700 7700 7700 7700 7700 7700 7700
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