A company paid $50,000 for some research equipment, which it believes will have zero salvage value at the end of its 5-year life. What is the book value of the equipment after 3 years? Next, supposing that the equipment is sold for $30,000 at the end of the third year, how much gain or depreciation capture is there? Answer  questions using (a) Straight line (b) Double declining balance (c) Sum-of-years’-digits

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company paid $50,000 for some research equipment, which it believes will have zero salvage value at the end of its 5-year life. What is the book value of the equipment after 3 years? Next, supposing that the equipment is sold for $30,000 at the end of the third year, how much gain or depreciation capture is there? Answer  questions using

(a) Straight line

(b) Double declining balance

(c) Sum-of-years’-digits

 

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