A steam boiler has a first cost of $50,000. Use the sum-of-years digits (SOYD) depreciation accounting method with a $5,000 salvage value and a 10-year depreciation life; determine the boiler's book value at the end of year eight.

$2,425

Explanation:

Sum of the digits = 10 + 9 + 8+7 +6 + 5+ 4+ 3+ 2 +1  = 55

Depreciation expense :

1st year = 10/55 x $45,000 = $8,182

2nd year = 9/55 x $45,000 = $7364

3rd year = 8/55 x $45,000 = $6,545

4th year = 7/55 x $45,000 = $5,757

5th year = 6/55 x $45,000 = $4,909

6th year = 5/55 x $45,000 = $4,091

7th year = 4/55 x $45,000 = $3,273

8th year = 3/55 x $45,000 = $2,454

Total depreciation               = $42,575

Book Value = $45,000 - $42,575 = $2,425

the boiler's book value at the end of year eight is $2,425

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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