uiglts. B) none of these Use the following to answer questions 9-11 Brinkman Cor

Question

uiglts. B) none of these Use the following to answer questions 9-11 Brinkman Corporation bought equipment on January 1, 2007 .The equipment cost $90,000 and had an expected salvage value of $15,000. The life of the equipment was estimated to be 6 years. 9. The depreciable-cost of the equipment is A) $90,000 B) $75,000 C) $50,000 D) S12,500 10. The depreciation expense using the straight-line method of depreciation is A) $17,500 B) $18,000(Cy S12,500 D) none of the above 11. The book value of the equipment at the beginning of the third year would be A) $90,000 B) $75,000 (C $65,000 D) $25,000

Explanation / Answer

9. Depreciable cost = Cost of equipment - salvage value

= 90000-15000

= 75000

10. Depreciation as per straigh line method

Depreciation = Depreciable cost / Lfe

=75000/6

= 12500

11. Book value at the beginning of year 3 = Cost - Accumulated depreciation

Accumulated depreciation = 12500*2

= 25000

Book value = 90000-25000

= 65000

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