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the digby company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. suppose at the end of 15 years this plant and equipment can be salvaged for $4,090,000 (1/10th of its original cost). what will be the book value of this purchase (excluding all other plant and equipment) after its first year of use? use generally accepted (fasb) accounting principles.

Answer :

RAFIKIEDU08GO

The book value of this purchase (excluding all other plant and equipment) after its first year of use will be $33,538,000.

Depreciation Expense = (Cost - Salvage Value) / Useful Life =($40,900,000 - $4,090,000) / 15 years = $36,810,000 / 15 years = $2,454,000. Accumulated Depreciation = Depreciation Expense x 3 years = $2,454,000 x 3 = $7,362,000.

Cost = $40,900,000; Less: Accumulated Depreciation = 7,362,000. So, the net book value = $33,538,000.

Property, Plant, and Equipment is a category of long-term assets that is virtually entirely made up of depreciable items. The cost of them will be shown in the balance less the accumulated depreciation.

Generally Accepted Accounting Principles, or GAAP, are guidelines that cover all the specifics, intricacies, and legalities of corporate and business accounting. GAAP serves as the cornerstone for the Financial Accounting Standards Board's (FASB) extensive collection of authorized accounting practices.

To learn more about GAAP visit: https://brainly.com/question/4903082

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