Baker, Inc. uses the sum-of-the-years’-digits method to depreciate a $79,600.00 piece of equipment that has an estimated life of 20 years. The salvage value is $4,000.00. The book value at the end of year 2 is

The book value at the end of year 2 of the equipment depreciated using the sum-of-the-years’-digits method is $65,560.What is the book value at the end of  year 2? Depreciation is a method used to expense the cost of an asset. Book value is the cost of the asset less the accumulated depreciation. Sum-of-the-year digits = (remaining useful life / sum of the years ) x  (Cost of asset - Salvage value)Depreciation expense in year 1:Sum of the years = 1 +2 +3 +4 + 5 + 6 + 7 + 8 + 9 + 10+ 11 + 12 + 13 + 14 + 15 + 16 + 17 + 18 + 19 + 20 = 210Undepreciated life of the asset = 20(20 / 210) x ($79,600 - 4,000) = 7200Depreciation expense in year 2: 19 / 210 x ($79,600 - 4,000) = 6840Book value = 79600 - 7200 - 6840 = $65,560To learn more about depreciation, please check: