MacKenzie Manufacturing Purchased Equipment for $160,000

MacKenzie Manufacturing purchased equipment for $160,000.In addition,shipping charges of $2,000 were incurred to obtain the equipment.The company paid $12,500 to construct a foundation and install the equipment.The equipment is estimated to have a residual value of $15,000 at the end of its 5-year useful life. Using the straight-line method,what is the book value of the equipment at the end of the third full year of use?

A) $78,800
B) $55,300
C) $71,000
D) $63,800

Correct Answer:

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