Question

a machine asset was placed in operation on april 1, 2023. the asset had an acquisition cost of $57,000, a salvage value of $3,000, and an estimated useful life of 12 years. the straight - line method of depreciation is being used. q. what is the book value of this asset at december 31, 2023? $53,625 $52,500 $4,500 $3,375

Explanation:

Step1: Calculate annual depreciation

Annual depreciation = $\frac{Cost - Salvage\ value}{Useful\ life}$ = $\frac{57000 - 3000}{12}$ = $\frac{54000}{12}$ = $4500$.

Step2: Calculate depreciation for 2023

The asset was in use from April 1 - December 31, 2023, for 9 months. Depreciation for 2023 = $\frac{9}{12}\times4500$ = $3375$.

Step3: Calculate book - value

Book - value = Cost - Depreciation for 2023 = $57000- 3375$ = $53625$.

Answer:

$53625$