Question

A piece of equipment is purchased on May 1, 2007 for $80,000 and has a residual value of $5,000. The equipment's useful life is 8 years or 12,500 hours. It is used 2,700 hours in 2007, and 2,600 in 2008.

The question is what is the book value on December 31, 2009 if I use the straight-line method.

The answer is not 51,875.

Nov 9, 2007

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