Answer:
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 = [tex]\frac{Cost-Residual Value}{Useful life}[/tex]
Annual straight line depreciation = [tex]\frac{100,000 - 20,000}{10}[/tex]
Annual straight line depreciation = [tex]\frac{80,000}{10}[/tex]
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.
