Question

Part 1 Financial Accounting 214 ased a used CAT estimated use ue is $100,000 Mini-Exercise Depreciation calculation methods Gandolfi Construction Co. purchased a new 6.3 336DL earth mover at a cost of $500,000 in January 2016. The company's estimat LO 3 ful life of this heavy equipment is 10 years, and the estimated salvage value is $100 Required: a. Using straight-line depreciation, calculate the depreciation expense to be recognized for 2016, the first year of the equipment's life, and calculate the equipment's net book value at December 31, 2018, after the third year of the equipment's life.

Answer 1

Solution: 40000 Depreciation for 2016=(cost-salvage)/useful life (500000-100000)/10 cost Less : accumulated depreciation=40000*3 Net book value at the end of year 3 500000 120000 380000