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Benz and Jacobs Accounting purchased a new computer system for $3,500. The total resale value after 5 years is estimated to be $525. Using the straight-line method, Benz and Jacobs determined that the computer system would depreciate $595 per year. What is the salvage value of the system?

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Aliwohaish12
3500-5*595=525 salvage value

Answer: The salvage value of the system is $525.

Step-by-step explanation:

Since we have given that

Cost of a new computer system = $3500

Number of useful life of the asset = 5 years

Annual depreciation expense = $595

So, we need to find the "Salvage value of the system":

According to straight line method, we know the formula :

[tex]Annual\ depreciation=\dfrac{Cost-Salvage\ value}{Useful\ life}\\\\\$595=\dfrac{3500-salvage\ value}{5}\\\\$595\times 5=3500-Salvage\ value\\\\\$2975=\$3500-Salvage\ value\\\\\$3500-\$2975=Salvage\ value\\\\\$525=Salvage\ value[/tex]

Hence, The salvage value of the system is $525.

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