Apex Fitness Club usesstraight-line depreciation for a machine costing $27,500,

Question

Apex Fitness Club usesstraight-line depreciation for a machine costing $27,500, with anestimated four-year life and a $2,600 salvage value. At thebeginning of the third year, Apex determines that the machine hasthree more years of remaining useful life, after which it will havean estimated $2,150 salvage value. Compute (1) the machine's bookvalue at the end of its second year and (2) the amount ofdepreciation for each of the final three years given the revisedestimates.

(1)

Machine's book value at the end of its second year. (Donot round the depreciation of each year. Round the totaldepreciation for two years to a whole number.)

Book value

$

(2)

Depreciation amount for each of the final three years given therevised estimates. (Round each answer to the nearest wholedollar amount.)

Year 1

$

Year 2

$

Year 3

$

(1)

Machine's book value at the end of its second year. (Donot round the depreciation of each year. Round the totaldepreciation for two years to a whole number.)

Explanation / Answer

4 Years

Straight Line

( 27,500 - 2,600 ) / 4

27 ,500 - ( 6,225 * 2 )

( 15,050 - 2,150 ) / 3

4,300

Original Scenario Cost of the Machine 27,500.00 Salvage Value 2,600.00 Life of the Machine

4 Years

Method of Depreciation

Straight Line

Depreciation Per Year

( 27,500 - 2,600 ) / 4

6,225.00 Machine's Book Valueat

27 ,500 - ( 6,225 * 2 )

the end of second year Machines BV after 2 years 15,050.00 After Revision , Depreciation amount foreach

( 15,050 - 2,150 ) / 3

of the three year

4,300

Depreciation for finalyears Year1 4,300.00 Year2 4,300.00 Year3 4,300.00

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.