Espanola Co

Multiple Choice

Espanola Co. purchases equipment with a cost of $25,000 and a trade-in value of $4,000. Espanola Co. estimates that the equipment will have a useful life of 7 years. Assuming Espanola Co. has depreciated the equipment for a total of 4 years using the straight-line method, what is the book value of the equipment?

A) $12,000
B) $13,000
C) $8,000
D) None of the answers listed