On April 2, Year 1, Victor, Incorporated acquired a new piece of filtering equipment. The cost of the equipment was $580,000 with a residual value of $30,000 at the end of its estimated useful lifetime of 10 years. Victor uses a calendar year-end for financial reporting.

If Victor uses straight-line depreciation with the half-year convention, the book value of the equipment at December 31, Year 2 will be:

Multiple Choice

• $470,000.

• $495,000.

• $497,500.

• $362,500.