Equipment was purchased for $85,000 on January 1, 2021.Freight charges amounted to $3,500 and there was a cost of $10,000 for building a foundation and installing the equipment.It is estimated that the equipment will have a $15,000 salvage value at the end of its 5-year useful life.What is the amount of accumulated depreciation at December 31, 2022 if the straight-line method of depreciation is used?
A)$33,400.
B)$16,700.
C)$14,300.
D)$28,600.

Question

Quizplus · Accepted Answer

The correct answer is A.The total cost of the equipment is $85,000 + $3,500 + $10,000 = $98,500. The annual depreciation expense is $98,500 - $15,000 / 5 = $16,700. The accumulated depreciation at December 31, 2022 is $16,700 * 2 = $33,400.

Equipment Was Purchased for $85,000 on January 1, 2021