XYZ Company owns an asset with historical cost of $75,000,estimated useful life of 10 years,and salvage value of $5,000.As of December 31,2011,the asset has accumulated depreciation of $49,000 after adjustment.The company still owes $20,000 in liabilities from the purchase of the asset years ago.What is the asset's book value on December 31,2011?
A)$70,000
B)$26,000
C)$21,000
D)$6,000

Question

Quizplus · Accepted Answer

The book value of an asset is calculated as the historical cost minus accumulated depreciation. Therefore, the book value is $75,000 - $49,000 = $26,000. The liabilities owed do not affect the book value calculation.

XYZ Company Owns an Asset with Historical Cost of $75,000,estimated