the balance in the equipment acccount is $3,150,000 and the balance in the accumulated depreciation eqipment account is $2,075,000. A. what was the book value of the fixed costs? B. would the book value of microsofts fixed assets normally approximate their fair market values?
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Question & Answer: the balance in the equipment acccount is $3,150,000 and the balance in the…..
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|Book value = equipment – depreciation. $3150,000 – $2075,000||1,075,000.00|
|The book value of the equipment would be $1075,000; However, this does not necessarily mean that the item has lost $2075,000 in value, but rather the depreciation of the item has been expensed out through the accounting periods and recorded thusly for the usefulness within those accounting periods. The depreciation expense reflects how much that asset costs the company when assigned to a specific accounting period. Therefore, depreciation does not necessarily relate to the value or loss of value of an asset, but rather the cost and expenditure that that asset reflects within a specific period of time|