Proficient:

Describe the difference between depreciation expense and accumulated depreciation.

Describe the formula used for computing the straight line depreciation for a depreciable asset. Explain how to calculate an asset's book value.

Distinguished:

The balance in the equipment account is $1,375,000, and the balance in the accumulated depreciationequipment account is $725,000.

What is the book value of the equipment and does that amount mean that the equipment has a loss in real value of $725,000? Explain your response.