In its financial statements, Trio uses straight-line depreciation with the half-year convention. The book value of the equipment at December 31, 2006, will be:
a $29,000. b $35,000. c $31,000. d Some other amount.
To calculate the book value of the equipment at December 31, 2006, we need to understand the concept of straight-line depreciation with the half-year convention.
In straight-line depreciation, the cost of the equipment is spread evenly over its useful life. The half-year convention assumes that the equipment is put into service halfway through the year, so only half of the depreciation is recognized in the year of acquisition and the year of disposal.
To find the book value at December 31, 2006, we need to consider the following information:
1. Cost of the equipment: This information is not provided in the question. Without knowing the initial cost, we cannot calculate the book value.
2. Useful life: The question does not mention the useful life of the equipment. Without this information, we cannot determine how many years the equipment will be depreciated over.
Given that the necessary information is not provided, we cannot determine the book value of the equipment at December 31, 2006. The correct answer is "d) Some other amount."