Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated
ID: 2492145 • Letter: N
Question
Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2015 and was used 2,700 hours in 2015 and 2,600 hours in 2016.
Refer to the information about Norwood, Inc.
If Norwood uses the straight-line method, what is the book value at December 31, 2017?
Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2015 and was used 2,700 hours in 2015 and 2,600 hours in 2016.
Explanation / Answer
Crane Cost 80000 Salvage Value 5000 Depreciable Value 75000 Usefull Life 8 Depreciation per year 9375 Accumulated depreciation for three year 28125 9375*3 Book Value at 2017 51875 80000-28125 Ans is a 51875
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