Question

stering Depreciation uses the straight-line method. Assets purchased between the 1* and 15hare depreciated for the entire month; assets purchased after the 15th as though te acquired the following month. On May 2, 20x1, ZyCo purchases for $25,000 ftrth that it expects to last for 10 years and to have a residual value of $1,000. What is balance in the accumulated depreciation account at the end of 20x37 y were furniture a. $2,400 b. $6,400 c. $7,200 d. Insufficient information to calculate Under GAAP, the straight-line depreciation rate equals: a. Depreciable base/Years of estimated life 0. b. Depreciation rate × Depreciable base c. (Original cost-Residual value)/Years of estimated life d. 1/Years of estimated life . On January 1, 20X1, PrimeCo, which uses the straight-line method, purchases for $59,000 a machine that it expects to last for 10 years and to have a residual value of $8,000. What is the balance in the Accumulated Depreciation account at the end of 20x4? ) $20,400 b. $15,300 c. $23,600 d. $38,600

Answer 1

ļasperstraight line method, cost of asset estimated salvage value - depreciable base 11 S59,000 S8,000 $51,000 10 5,100 4 life - annual depreciation * number of years (20X1 to 20X4) accumulated depreciation at the end of 20X4 $20,400 hence, balance in accumulated depreciation at the end of 20X4 is $20,400 hence, the correct answer is a. $20,400