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Trekkers Footwear bought a piece of machinery on January 1, 2006 at a cost of $2.3 million, and the machinery is being depreciated annually at an amount of $230,000 for 10 years. Its market value on December 31, 2008 is $1.75 million. The firm's accountant is preparing its financial statement for the fiscal year end on December 31, 2008. The net value of the asset that should be reported on the balance sheet is:________.
A. $1.75 million.
B. $2.3 million.
C. $1.61 million.
D. $230,000.

Respuesta :

hyderali230

Answer:

C. $1.61 million.

Explanation:

Machinery Cost = $2,300,000

Depreciation per year = $230,000

Accumulated Depreciation on Dec 31, 2008 = Depreciation number of years spent

Accumulated Depreciation on Dec 31, 2008 = $230,000 x 3

Accumulated Depreciation on Dec 31, 2008 = $690,000

Machinery Net Book value = 2,300,000 - 690,000

Machinery Net Book value = $1,610,000 = $1.61  million

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