(Detailed Explanation Please)

On January 1, Year 2, Ballard Company spent $12,000 on an asset to improve its quality. The asset had been purchased on January 1, Year 1, for $38,000. The asset had a $6,800 salvage value and a 6-year life. Ballard uses straight-line depreciation. What would be the book value of the asset on January 1, Year 5?

Multiple Choice

• $15,600.

• $15,200.

• $7,600.

• $22,000.