Answer:
$670,000
Explanation:
For computing the book value, first we have to determine the depreciation expense using the straight line method which is shown below:
= (Original cost - residual value) ÷ (estimated useful life)
= ($1,050,000 - $100,000) ÷ (5 years)
= ($950,000) ÷ (5 years)
= $190,000
In this method, the depreciation is same for all the remaining useful life
Now the book value is
= Original cost - depreciation expense × number of years
= $1,050,000 - $190,000 × 2
= $1,050,000 - $380,000
= $670,000
