Arc Co. purchased a piece of equipment for $25,000. At the end of the year, the book value of the equipment is $12,000. The salvage value is 0. How much is accumulated depreciation at the end of the period?

Accumulated depreciation is $13,000

Explanation:

Net book value = Cost-Accumulated depreciation

Accumulated depreciation=Cost - Net Book Value

Cost is $25,000

Net Book Value is $12,000

Accumulated depreciation=$25,000-$12,000

Accumulated depreciation=$13,000

The accumulated depreciation is usually the cost of an item less net book value at end of a period, the accumulated depreciation is $13,000 till date.

The salvage value would been useful if we compute depreciation, which can be done since the useful life of the equipment is not given i, e (cost-scrap value) / useful life.

The price of the equipment is 25,000 and at the end of the year the book value is 12,000 which means that the equipment has depreciated by 13,000 (25,000-12,000). So at the end of the period the accumulated depreciation is 13,000 because that is how much the equipment has depreciated.