a certain car was purchased for $32,000. the car has a resale value of $26,000 after a useful life of 6…
a certain car was purchased for $32,000. the car has a resale value of $26,000 after a useful life of 6 years. what is the book value of this car after 5 years? annual depreciation expense = $1,000 book value = $?
Answer
Explanation:
Step1: Recall book - value formula
The formula for book - value is $BV = P-AD$, where $BV$ is the book - value, $P$ is the purchase price, $A$ is the annual depreciation expense, and $D$ is the number of years of depreciation.
Step2: Identify given values
We know that $P = 32000$, $A = 1000$, and $D = 5$.
Step3: Calculate book - value
$BV=32000 - 1000\times5$ $BV = 32000-5000$ $BV = 27000$
Answer:
$27000$