Question

Question 4 0.6 points Save Answer Pearson Company bought a machine on January 1, 2017. The machine cost $180,000 and had an expected salvage value of $30,000. The life of the machine was estimated to be 5 year. The book value of the machine at the end of the second year would be $180,000 $150,000 $120,000 $80,000

Answer 1

Computation of Depreciation under Staright line method: Cost on 1/1/17 Less : Salvage Value Depreciable Cost (A) Asset life (B) Annual Straight line depreciation value (A/B) $ $ $ 180,000.00 (30,000.00) 150,000.00 5 Years 30,000 $ Depreciation for year 1 Depreciation for year 2 30,000 30,000 Cost on 1/1/17 less : Depreciation for year 1 Cost at end of year 1 less: Depreciation for year 2 Cost at end of year 2 o toto to to 180,000.00 (30,000) 150,000 (30,000) 120,000 Option [C] is correct