Stahmann Products paid $380,000 for a numerical controller and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system 5 years after it was purchased for $51,000. State the numerical values for the following: remaining life at sale time, market value at sale time, and book value at sale time if 65% of the basis had been depreciated. The remaining life at sale time is years ___ The market value at sale time is $ ___ The book value at sale time if 65% of the basis has been depreciated is $___
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Stahmann Products paid $380,000 for a numerical controller and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system 5 years after it was purchased for $51,000. State the numerical values for the following: remaining life at sale time, market value at sale time, and book value at sale time if 65% of the basis had been
The remaining life at sale time is years ___
The market value at sale time is $ ___
The book value at sale time if 65% of the basis has been depreciated is $___
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