Gourmet Shop purchased cash registers on April 1 for $12,000. If this asset has an estimated useful life of four years, what is the book value of the cash registers on May 31? a.$250. b.$3,000. c.$9,000. d.$11,500.

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7 June, 04:31

Gourmet Shop purchased cash registers on April 1 for $12,000. If this asset has an estimated useful life of four years, what is the book value of the cash registers on May 31? a.$250. b.$3,000. c.$9,000. d.$11,500.

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Maddox · Answer 1

d.$11,500.

Explanation:

The cash register was bought for 12,000 and it has a useful life of 4 years which is equal to 48 months. So to calculate how much it would depreciate each month we would divide 12,000 by 48. 12,000/48 = 250.

So in this case from April 1 to May 31 is 2 months which means that the cash register was used for 2 months and would be depreciated over the use of 2 months.

1 month deprecation = 250

2 month deprecation = 250*2 = 500

The depreciation for 2 months is 500 and in order to find the book value at May 31 we will subtract the depreciation over 2 months from the original price.

12,000-500=11,500