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Kansas Enterprises purchased equipment for $60,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $5,000 at the end of five years. Using the double-declining method, the book value at December 31, 2019, would be:

Respuesta :

Answer:

$49,000

Explanation:

The computation of the book value at December 31, 2019 is shown below:-

Depreciation expenses = (Cost of equipment - Residual value) ÷ Service life

= ($60,000 - $5,000) ÷ 5

= $55,000 ÷ 5

= $11,000

So,

Book value at December 31, 2019 = Cost of the equipment - Depreciation expenses

= $60,000 - $11,000

= $49,000

Therefore for computing the book value of December 31, 2019 we simply applied the above formula.

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