Question

In: Accounting

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 2 years ago
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