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1 December, 00:45

Vacation Property Rentals purchased 50 television sets for their rental units at a cost of $250 per television. The televisions have an estimated life of 5 years and a salvage value of $40 per set. What is the book value for all of the televisions at the end of the third year?

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  1. 1 December, 01:19
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    Under A straight line basis which is a method of computing depreciation and amortization by dividing the difference between an asset's cost and its expected salvage value by the number of years it is expected to be used. Also known as straight line depreciation or straight line amortization, this is the simplest depreciation method. But instead of that find The rate of depreciation

    100/5 years=20% depreciation rate per year

    Total cost 250*50=12,500

    Salvage value 40*50=2,000

    Subtract the salvage value from the total cost of televisions

    12,500-2,000=10,500

    In the first year the depreciation is

    10,500*0.2=2,100

    Book value

    12,500-2,100=10,400

    In the second year the depreciation is

    10,500*0.2=2,100

    Book value

    10,400-2,100=8,300

    In the third year the depreciation is

    10500*0.2=2100

    Book value

    8300-2100=6200

    the book value for all of the televisions at the end of the third year is 6200
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