purchased a computer system for $52,000 at a non-profit clinic You expect to use

Question

purchased a computer system for $52,000 at a non-profit clinic You expect to use it for 8 years and sell it at $5,000 (salvage value). What value would appear on BOTH the balance sheet and income statement at the end of 4 years, and under what names? purchased a computer system for $52,000 at a non-profit clinic You expect to use it for 8 years and sell it at $5,000 (salvage value). What value would appear on BOTH the balance sheet and income statement at the end of 4 years, and under what names?

Explanation / Answer

Cost of Computer equipment: $ 52000 Scrap value: $ 5,000 Life: 8 years Annual depreciation: Cost - Salvage / Life = (52000 -5000) /8 = $5875 Depreciation charged for 4 years: 5875* 4 = $23,500 Items to be shown in Financial Statement INCOME STATEMENT: Depreciation expense (Annual depreciation) $5,875 BALANCE SHEET: Cost of Computer Equipment 52000 Less: Accumulated Depreciation -23500 Net value of Computer Equipment 28500

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