tory BokmarRS window Help ezto.mh connect. BA 211 Financial Acco ACCOUNTING Week
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tory BokmarRS window Help ezto.mh connect. BA 211 Financial Acco ACCOUNTING Week 9-LT Assets Question 2 (of 7) 2. M9-4 Computing Book Value (Straight-Line Depreciation) [LO 9-3] A machine that cost $126,500 has an estimated residual value of $5,500 and an estimated useful life of eleven years. The company uses Do not round intermediate calculations.) straight-line depreciation. Calculate its book value at the end of year 9. References eBook &Resources; Worksheet Difficulty: 1 Easy M9-4 Computing Book Value Straight-Line Depreciation) [LO 9- depreciation methods as economic benefits 31 Learning Objective: 09-03 Apply various are used up over time. 20Explanation / Answer
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2. first let us calculate the annual depreciation amount under straight line method
=>(cost - residual value) / useful life
=>($126,500 - $5,500) / 11 years
=>($121,000)/ 11 years
=>$11,000.
now,
book value at the end of year 9 in this case = cost - (depreciation per year * 9years)
=>$126,500 - ($11,000 * 9)
=>$27,500.
Book value = $27,500.
3rd question
.first let us know the depreciation per hour
=>(cost - residual value) / number of hours estimated to be used
=>($324,000 - $18,000) / 18,000
=>$17 per hour.
the number of hours used up till end of year 3 =3000 + 5000 +7000
=>15,000 hours.
=>total depreciation till the end of year 3 = $17 * 15,000 =>$255,000.
book value at end of year 3 = cost - depreciation till year 3
=>$324,000 - 255,000
=>$69,000.
book value = $69,000
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