Mitchell Corporation bought equipment on January 1, 2022.The equipment cost $300,000 and had an expected salvage value of $50,000.The life of the equipment was estimated to be 6 years.The book value of the equipment at the beginning of the third year would be
A)$300,000.
B)$250,000.
C)$216,666.
D)$83,333.

Question

Quizplus · Accepted Answer

The equipment depreciates by $41,666.67 per year (($300,000 - $50,000) / 6). After two years, the accumulated depreciation is $83,333.34, so the book value at the beginning of the third year is $216,666.66 ($300,000 - $83,333.34).

Mitchell Corporation Bought Equipment on January 1, 2022