Company A purchases a machine for GBP 8384 and intends to use it for 10 years....

Company A purchases a machine for GBP 8384 and intends to use it for 10 years. The company expects no residual value at the end of the usage time ( GBP 0) and uses straight-line depreciation. Calculate the book value of the machine at the end of year 2.

Select one:

8384

6707

None of the other answers is correct.

4192

Solutions

Expert Solution

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Company A		Note
Straight line method	Amount $
Cost of asset	8,384.00	See A
Less: Residual Value	-	B
Depreciable Value	8,384.00	C=A-B
Useful life	10.00	D
Annual depreciation expense	838.40	E=C/D
Depreciation expense for year 1	838.40	F= See E
Depreciation expense for year 2	838.40	G= See E
Book value at the end of year 2	6,707.00	H=A-F-G
So answer is 6,707.

ekkarill92 answered 1 year ago

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