Answered

Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Experience the ease of finding accurate answers to your questions from a knowledgeable community of professionals. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.

The Andrews Company has just purchased $56,480,000 of plant and equipment that has an estimated useful life of 15 years. Suppose at the end of 15 years this plant and equipment can be salvaged for $5,648,000 (1/10th of its original cost). What will be the book value of this purchase (excluding all other Plant and Equipment) after its first year of use

Sagot :

Tundexi

Answer:

$53,091,200

Explanation:

Depreciation expenses = Cost - Salvage value / Expected useful life of the plant and equipment

Depreciation expenses = $56,480,000 - $5,648,000 / 15 years

Depreciation expenses = $50,832,000 / 15 years

Depreciation expenses = $3,388,800

Book value = Cost - Depreciation expenses for first year

Book value = $56,480,000 - $3,388,800

Book value = $53,091,200

Thus,  the book value of plant and equipment after its first year of use is $53,091,200.

Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.