Question

Smpted investime Financial Accounting Spring 2020 2101000K Section Out Kansas Enterprises purchased equipment for $78,000 on January 1 2021 The equipment is expected to have a ten year service life, with a residual value of $7.200 at the end of ten years Using the straight-line method, depreciation expense for 2022 and the book value at December 31, 2022 would be: Multiple Choice O $7000 and $56.640 O 7800 and $62.400 O $700 and 55.200 O $7080 and $63.840.

Answer 1

Answer is option d

Depreciation is 7080$

Book value 63840$

Solution

Depreciation = cost of machine 78000 - 7200 salvage value =70800$

Life of asset 10 years =70800/10

Per year depreciation is $7080

Bookvalue at 31 Dec 2022

Is 78000-7080-7080= 63840$

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