Equipment was purchased for $17,000 on January 1, 2006. Freight charges amounted
ID: 2434416 • Letter: E
Question
Equipment was purchased for $17,000 on January 1, 2006. Freight charges amounted to $700 and there was a cost of $2,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $3,000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2007, if the straight-line method of depreciation is used?Equipment was purchased for $17,000 on January 1, 2006. Freight charges amounted to $700 and there was a cost of $2,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $3,000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2007, if the straight-line method of depreciation is used?
Explanation / Answer
(17,000+700+2,000-3,000)/5= 3,340 per year. So at the end of 2007 there will be 2*3,340= $6,680 accumulated depreciation.
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