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If Kim buys a car for $30,000 with an estimated life of 5 years, with a residual value of $5,000, what is the book value at the end of year 4? Assume straight-line depreciation

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If Kim buys a car for $30,000 with an estimated life of 5 years, with a residual value of $5,000, what is the book value at the end of year 4? Assume straight-line depreciation.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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