Trekkers footwear bought a piece of machinery on January 1m 2006 at a cost of $2.3 million, and the machinery is being depreciated annually at an amount of $230,000 for 10 years. ITs market value on December 31, 2008 is $1.75 million. The firm's accountant is preparing its financial statement for the fisical year end on December 31, 2008. The asset's value should be recognized on the balance sheet at? a. 230,000 b. 1.61 million c. 1.75 million d, 2.3million

Question

Business

Connor Holloway

23 November, 01:33

Trekkers footwear bought a piece of machinery on January 1m 2006 at a cost of $2.3 million, and the machinery is being depreciated annually at an amount of $230,000 for 10 years. ITs market value on December 31, 2008 is $1.75 million. The firm's accountant is preparing its financial statement for the fisical year end on December 31, 2008. The asset's value should be recognized on the balance sheet at? a. 230,000 b. 1.61 million c. 1.75 million d, 2.3million

+5

Answers (1)

Know the Answer?

Jaqueline Mcbride · Answer 1

b. $1.61 million

Explanation:

The computation of assets value is shown below:-

Data provided

Cost of Assets = $2.3 million

Annual depreciation = $230,000

Total numbers of years = 3

Total depreciation = $230,000 * 3

= 690,000

= 0.69 million

Assets value = Cost of Assets - Total depreciation

= $2.3 million - $0.69 million

= $1.61 million

So, Given Market Value = $1.75 million and as per accounting conventions, Recorded book value are assets.