Cost of property encompass fees incurred until asset is positioned to use. In this example book value will include coins paid quantity financed and setup expenses incurred. $36000 is the correct answer!
The required details about book value is mentioned in below paragraph.
In accounting, book value is the cost of an asset in keeping with its stability sheet account stability. For property, the cost is primarily based totally at the authentic fee of the asset much less any depreciation, amortization or impairment fees made in opposition to the asset The book value actually means the cost of a commercial enterprise in keeping with its books or accounts, as pondered on its monetary statements. Theoretically, it's far what buyers could get in the event that they offered all of the company's property and paid all its money owed and obligations.
Computation of Book Value of machine on Dec 31
Cash paid for machine $ 10,000.00
Note payable signed for machine $ 30,000.00
Setup Charges incurred for machine $ 2,000.00
Total Cost $ 42,000.00
Less: Depreciation for the year $ 6,000.00
Book value of machine on dec 31 $ 36,000.00
$36000 is the correct answer!
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