The book value of the machine on December 31 is calculated as follows:
Initial cost of the machine: $10,000
Financed amount: $30,000
Setup charge: $2,000
Total cost of the machine: $42,000
Annual depreciation: $6,000
Monthly depreciation: $500
Depreciation for the year: $6,000
Book value on December 31 = Total cost of the machine - Total accumulated depreciation
Book value on December 31 = $42,000 - $6,000
Book value on December 31 = $36,000
Therefore, the book value of the new machine on December 31 is $36,000.
a company bought a new machine for its warehouse on January 1. paid $10,000 in cash, financed the rest of the purchase price via a $30,000 5-year note, incurred a separate $2,000 setup charge. monthly depreciation is $500 ($6,000 annual). whats the book value of the new machine on dec 31
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