Asked by
Katelyn Denno
on Nov 14, 2024
Verified
On October 1 2017 Holt Company places a new asset into service. The cost of the asset is $120000 with an estimated 5-year life and $30000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31 2017 balance sheet assuming that Holt Company uses the double-declining-balance method of depreciation?
A) $78000
B) $90000
C) $108000
D) $114000
Double-Declining-Balance
A method of accelerated depreciation where an asset's book value is reduced at double the rate of traditional straight-line depreciation.
Book Value
The net value of an asset, calculated as the original cost minus accumulated depreciation, depletion, or amortization.
Plant Asset
Long-term tangible asset that is used in the production process of a company, such as machinery, buildings, and equipment, contributing to the company's operations.
- Absorb the core ideas and processes related to the depreciation of assets, including the assortment of ways to calculate depreciation.
- Understand the significance of aligning the depreciation approach with the asset's utilization and its revenue contribution throughout its useful lifespan.
Verified Answer
PG
Learning Objectives
- Absorb the core ideas and processes related to the depreciation of assets, including the assortment of ways to calculate depreciation.
- Understand the significance of aligning the depreciation approach with the asset's utilization and its revenue contribution throughout its useful lifespan.