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Q8Q

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Intermediate Accounting (Kieso)
Found in: Page 582

Short Answer

Workman Company purchased a machine on January 2, 2017, for $800,000. The machine has an estimated useful life of 5 years and a salvage value of $100,000. Depreciation was computed by the 150% declining-balance method. What is the amount of accumulated depreciation at the end of December 31, 2018?

Answer

Accumulated depreciation = $408,000

See the step by step solution

Step by Step Solution

Step 1: Meaning of Accumulated Depreciation

Depreciation expense is an expense that is incurred on a tangible asset due to obsolescence or the passage of time on that asset. A company has a different option for determining depreciation, but straight-line depreciation is the simplest one.

Step 2: Determining the amount of accumulated depreciation 

Calculating depreciation rate

Calculating depreciation for 2017

Calculating depreciation for 2018

Calculating Accumulated depreciation for 2018

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