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Equipment that cost $6,000 has Accumulated Depreciation of $300 after three months. What is its book value (carrying amount) at that point?
A$300
B$6,000
C$5,700
D$5,900
Answer & Solution
Correct answer: C. $5,700
1. Book value $=$ cost $-$ accumulated depreciation.
2. Book value $= 6{,}000 - 300 = 5{,}700$.
3. So C is correct.
4. B ignores depreciation; A is the accumulated depreciation itself; D is the book value after only one month.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §2.3.1 "Fixed Assets—Deferred Expense", p.74_
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