Ask Question
BusinessBusiness
7 March, 11:13

Santiago Corporation bought equipment on January 1. The equipment cost $320,000 and had an expected salvage value of $40,000. The life of the equipment was estimated to be 7 years and straight-line depreciation is used. The book value of the equipment at the end of the fifth year would be

A) $168,000

B) $320,000

C) $200,000

D) $120,000

E) $150,000

+4
Answers (1)
  1. 7 March, 13:08
    0
    The correct answer is D = $ 120,000.

    Explanation:

    Determining the depreciation base

    Depreciation base = Acquisition cost - Salvage Value

    Depreciation base = 320,000 - 40,000.

    Depreciation base = $280,000.

    Determining the depreciation rate.

    Depreciation rate = depreciation base/Useful life.

    Depreciation rate = 280,000/7.

    Depreciation rate = $ 40,000.

    Determining accumulated depreciation.

    Accumulated depreciation = depreciation rate * number of years.

    Accumulated depreciation = 40,000 * 5.

    Accumulated depreciation = $200,000.

    Determining the book value of the equipment.

    Book value of the equipment = Acquisition cost - Accumulated depreciation.

    Book value of the equipment = 320,000 - 200,000.

    Book value of the equipment = $120,000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Santiago Corporation bought equipment on January 1. The equipment cost $320,000 and had an expected salvage value of $40,000. The life of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Which of the following statements is true? (A) The expectations hypothesis indicates a flat yield curve if anticipated future short-term rates exceed current short-term rates.
Answers (1)
At the high level of activity in November, 8000 machine hours were run and power costs were $16000. In April, a month of low activity, 3000 machine hours were run and power costs amounted to $7000.
Answers (1)
Which factor of production receives the largest portion of income in the united states? a. land b. labor c. physical capital d. entrepreneurship e. interest?
Answers (1)
How many businesses were operating in the united states at the end of 2008
Answers (1)
True or False: Those using a learner's permit have restrictions on when they may drive because alcohol-related crashes are most likely to occur during school hours on a weekday.
Answers (1)
New Questions in Business
You want to create a slide that lists the pros and cons of using cloud storage as part of your presentation on business technology. Which pre-set layout would you want to use? A. Content with caption B. Title only C.
Answers (2)
Two or more products are produced using limited resources. The firm would like to determine how many units of each product it should produce to maximize overall profit given its limited resources.
Answers (1)
1. Calculate owners' equity. Doughnut Company shows $130,000 worth of assets on its December 31, 2009, balance sheet. If total liabilities are $55,800, what is the amount of owners' equity?
Answers (1)
The term "constant returns to scale" describes a situation where expanding all inputs does not change the average cost of production. a larger-scale firm can produce at a lower cost than a smaller-scale firm.
Answers (1)
When you visit a campus, you should plan to do all of the following except. A. stay the night in a dorm. B. meet with a professor. C. sit in on a class lecture. D. attend a college party.
Answers (2)
Home » Business » Santiago Corporation bought equipment on January 1. The equipment cost $320,000 and had an expected salvage value of $40,000. The life of the equipment was estimated to be 7 years and straight-line depreciation is used.
Sign Up Forgot Password?