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Homework answers / question archive / CALCULATION OF BOOK VALUE On June 1, 20--, a depreciable asset was acquired for $6,840
CALCULATION OF BOOK VALUE
On June 1, 20--, a depreciable asset was acquired for $6,840. The asset has an estimated useful life of six years (72 months) and no salvage value. Using the straight-line depreciation method, calculate the book value as of December 31, 20--.
Computation of the book value as of December 31, 20--:-
Depreciation expense per month = (Cost - Salvage value) / Useful life
= ($6,840 - $0) / 72
= $95
Accumulated depreciation = $95 * 7
= $665
Book value = Cost - Accumulated depreciation
= $6,840 - $665
= $6,175
