Blanton Company bought equipment on January 1,2013,with a cost of $160,000,an estimated residual value of $40,000,and an estimated life of 15 years.It was depreciated by the straight-line method for four years.Due to obsolescence,it was determined at the beginning of 2017 that the useful life should be shortened by three years and the residual value changed to zero.What is the accumulated depreciation at the end of 2016?

Question

Quizplus · Accepted Answer

To calculate accumulated depreciation at the end of 2016, we need to calculate the depreciation expense for the first four years:

Annual depreciation = (Cost - Residual value) / Estimated useful life

Annual depreciation = ($160,000 - $40,000) / 15 = $8,000

Depreciation expense for four years = $8,000 x 4 = $32,000

So, the accumulated depreciation at the end of 2016 would be the sum of the depreciation expense for the first four years, which is $32,000.

Therefore, the correct answer is option B.

Blanton Company Bought Equipment on January 1,2013,with a Cost of $160,000,an