bocapsnml mala gement Simulations, Inc.8 The Chester Company has just purchased
ID: 2592298 • Letter: B
Question
bocapsnml mala gement Simulations, Inc.8 The Chester Company has just purchased $40,8900,000 of plant and equipment that has an estimated useful life of 15 years. Suppose at the end of 15 years this plant and equipment can be salvaged for $4,090,000 (1/10th of its original cost). What w be the book value of this purchase (excluding all other Plant and Equipment) after its first year of use? Use generally accepted (FASB) accounting principles. Select: 1 Save Answer $36,810,000 $38,446,000 $38,173,333 $34,356,000Explanation / Answer
SOLUTION
Book value of Assets would be - $38,446,000
Depreciation = ($40,900,000 - $4,090,000) / 15
= $2,454,000
Book value = Original costs - Depreciation
= $40,900,000 - $2,454,000 = $38,446,000
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