Pearson Company bought a machine on January 1, 2022.The machine cost $180,000 and had an expected salvage value of $30,000.The life of the machine was estimated to be 5 years.The book value of the machine at the beginning of the third year would be
A)$180,000.
B)$150,000.
C)$120,000.
D)$60,000.

Question

Quizplus · Accepted Answer

The machine depreciates by $30,000 per year (($180,000 - $30,000) / 5 years). After two years, the accumulated depreciation is $60,000, making the book value $120,000 ($180,000 - $60,000).

Pearson Company Bought a Machine on January 1, 2022