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A firm of lawyers purchases three new computers costing $3000 each. Experience with previous computers suggests that they will need to be updated after 4
A firm of lawyers purchases three new computers costing $3000 each. Experience with previous computers suggests that they will need to be updated after 4 years. At the end of this period, the second-hand value of each machine is estimated to be just $200. a) Using the straight-line method of depreciation, calculate the depreciation allowance per year for the computers. b) Calculate the book value of one computer in its third year of use. Carlos has just bought a new van for $40,000 to provide customers with a delivery service. The van has a useful life of 4 years and he expects to sell it for $8000 at the end of its life. a) Calculate the annual depreciation expense for the van. b) Calculate the book value of the van at the end of its second year
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