t the beginning of a fiscal year, Alexander Company buys a machine for $48,000.

Question

t the beginning of a fiscal year, Alexander Company buys a machine for $48,000. The machine has an estimated life of five years and an estimated salvage value of $4,000. Using the following four methods, determine the annual depreciation of the machine for each of the estimated five years of its life, the accumulated depreciation at the end of each year, and the book value of the machine at the end of each year. Round annual depreciation to the nearest dollar when rounding is required. Straight-line method YEAR ANNUAL DEPRECIATION ACCUMULATED DEPRECIATION BOOK VALUE AT END OF YEAR 1 $ $ $ 2 Year 3 Year 4 Year 5 Total $

Explanation / Answer

Hi, Only Straight Line Method is mentioned in the question. So I am providing details for that only. Annual Depreciation for Each Year would be: = (48000-4000)/5 = 8800 Accumulated Depreciation Year 1 = 8800 Year 2 = 17600 Year 3 = 26400 Year 4 = 35200 Year 5 = 44000 Book Value Year 1 = 44000 - 8800 = 35200 Year 2 = 44000 - 17600 = 26400 Year 3 = 44000 - 26400 = 17600 Year 4 = 44000 - 35200 = 8800 Year 5 = 44000 - 44000 = 0 Thanks.

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