At the beginning of year 1, looby corp. purchases equipment for $100,000. the equipment has a residual value of $20,000 and an expected useful life of 10 years. assuming straight-line depreciation, what is book value at the end of year 2?
a) 10,000 dollars
b) 28,000 dollars
c) 8,000 dollars
d) 30,000 dollars

None of the given options.

The book value of equipment at the end of 2nd year would be $84,000.

Explanation:

Cost = $100,000

Residual value = $20,000

Useful life = 10 years

Now,

Annual straight line depreciation =

Annual straight line depreciation =

Annual straight line depreciation =

Annual straight line depreciation = $8,000

The book value of an asset can be calculated using the following formula:

Book value (ending) = Book value (beginning) - Depreciation expense

Depreciation table has been constructed for 2 years to calculate the book value of equipment at the end of year 2.

answer; yield to maturity;

answer; monopolistic competition;