00:01
Now for apex fitness club we have to compute the machine's book value at the end of its second year.
00:06
Now, this apex fitness club is computing the depreciation using straight line methods.
00:12
So depreciation using straight line method.
00:27
So the depreciation rate or we can say the depreciation expense per year if you want to calculate using straight line method, that will be the cost of the machine less its salvage value upon the estimated life of the machine.
00:54
Now the cost of the asset is given to be $23 ,860 and its salvage value is of $2 ,400 and its estimated life is of four years.
01:07
So the per year depreciation expense comes to $535.
01:12
So this is the per year depreciation expense.
01:16
Now let's compute the machine's book value at the end of its third year.
01:25
On year one, the opening book value of machine given is $23 ,860.
01:47
So now what we will be doing? we will be subtracting the depreciation expense for that year.
01:53
So the depreciation expense we have already calculated.
01:57
And this will be annually $5 ,365 .35.
02:01
So, $5 .365.
02:05
So now if we solve this, then the balance that is coming is $18 ,495...