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Chrome File Edit View History Bookmarks Reople Window Help Thu Jn 2:81:40 AM Biniyam Eshete a ? 85 how ToOrpanre tconomes Hg ine Communry Colege Sue PinofAccoumng10.xyDp0oem 7-88 xSaping Learning 1interactive x ×, x c eztomeducation.com/hm.tpx?-0.468102897143167441530175161282 New Delisinthe process of e sing ba operaions. tt sold t? threeynardd ove stoSi value of $22.500. New Deli uses streight line depreciation for all equipment Pitza for $27asoo. The ons engraily cost $3.72.500 and had an estimated servic e lfe of 10 years and an estimated resiual Required information 300 points Required: 1. Celcuiabe the balance in the accumulated deprecistion account at the end of the third year References eBook & Resources Worksheet 300 points 2. Calculate the book vaue of the ovens at the end of the tnd year

Solution

Solution 1:

Cost = $372,500

Residual value = $22,500

Life = 10 years

Annual Straight line depreciation = (Cost - Residual value) / Life

= ($372,500 - $22,500) / 10 = $350,000/10 = $35,000

Accunulated depreciation Account balance at the end of third year = Annual depreciation * 3

= $35000*3 = $105,000

Solution 2:

Book value at the end of third year = Cost - Accumulated Depreciation account balance

= $372,500 - $105,000 = $267,500