CNN reported in early 2018 that higher-income shoppers are the biggest bargain shoppers searching Amazon, clicking on their mobile devices and even querying Alexa looking for the best deals. If Rebecca Johnson purchased a state-of-the-art Biologique Recherche facial machine for her home business for $108,000, with a useful life of 3 years and a residual value of $35,000. What would be the book value of the machine after the first year using the straight-line depreciation method? (Round your answer to the nearest dollar amount.) Book value
CNN reported in early 2018 that higher-income shoppers are the biggest bargain shoppers searching Amazon, clicking on their mobile devices and even querying Alexa looking for the best deals. If Rebecca Johnson purchased a state-of-the-art Biologique Recherche facial machine for her home business for $108,000, with a useful life of 3 years and a residual value of $35,000. What would be the book value of the machine after the first year using the straight-line depreciation method? (Round your answer to the nearest dollar amount.) Book value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![CNN reported in early 2018 that higher-income shoppers are the biggest bargain shoppers searching Amazon, clicking on their mobile devices, and even querying Alexa looking for the best deals. If Rebecca Johnson purchased a state-of-the-art Biologique Recherche facial machine for her home business for $108,000, with a useful life of 3 years and a residual value of $35,000.
What would be the book value of the machine after the first year using the straight-line depreciation method? *Round your answer to the nearest dollar amount.*
[Input field for Book value]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6c939943-f505-46a2-8642-caa114ee122b%2Fb5e4f11e-4ea1-4b89-8b26-a7b1b4120bec%2F05lhopl_processed.png&w=3840&q=75)
Transcribed Image Text:CNN reported in early 2018 that higher-income shoppers are the biggest bargain shoppers searching Amazon, clicking on their mobile devices, and even querying Alexa looking for the best deals. If Rebecca Johnson purchased a state-of-the-art Biologique Recherche facial machine for her home business for $108,000, with a useful life of 3 years and a residual value of $35,000.
What would be the book value of the machine after the first year using the straight-line depreciation method? *Round your answer to the nearest dollar amount.*
[Input field for Book value]
![**Educational Content: Depreciation Calculation**
Volkswagen car sales reached a record high of $6.23 million in 2017. One of their assembly lines purchased a new quality control computer for verifying VIN numbers, costing $7,985. This computer has a lifespan of 5 years with a residual value of $1,100. We need to calculate the depreciation expense for the computer in year 2 using the straight-line method.
**Calculation:**
1. **Initial Cost:** $7,985
2. **Residual Value:** $1,100
3. **Lifespan:** 5 years
**Straight-Line Depreciation Formula:**
\[ \text{Depreciation Expense per Year} = \frac{\text{Initial Cost} - \text{Residual Value}}{\text{Lifespan}} \]
**Substitute the Values:**
\[ \text{Depreciation Expense per Year} = \frac{7,985 - 1,100}{5} = \frac{6,885}{5} = \$1,377 \]
**Year 2 Depreciation Expense:** $1,377
**Diagram Explanation:**
The image includes a diagram labeled "Depreciation expense," with an arrow pointing to an answer box, showing where the calculated depreciation expense should be input.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6c939943-f505-46a2-8642-caa114ee122b%2Fb5e4f11e-4ea1-4b89-8b26-a7b1b4120bec%2F5lkdtaf_processed.png&w=3840&q=75)
Transcribed Image Text:**Educational Content: Depreciation Calculation**
Volkswagen car sales reached a record high of $6.23 million in 2017. One of their assembly lines purchased a new quality control computer for verifying VIN numbers, costing $7,985. This computer has a lifespan of 5 years with a residual value of $1,100. We need to calculate the depreciation expense for the computer in year 2 using the straight-line method.
**Calculation:**
1. **Initial Cost:** $7,985
2. **Residual Value:** $1,100
3. **Lifespan:** 5 years
**Straight-Line Depreciation Formula:**
\[ \text{Depreciation Expense per Year} = \frac{\text{Initial Cost} - \text{Residual Value}}{\text{Lifespan}} \]
**Substitute the Values:**
\[ \text{Depreciation Expense per Year} = \frac{7,985 - 1,100}{5} = \frac{6,885}{5} = \$1,377 \]
**Year 2 Depreciation Expense:** $1,377
**Diagram Explanation:**
The image includes a diagram labeled "Depreciation expense," with an arrow pointing to an answer box, showing where the calculated depreciation expense should be input.
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