Mather Company purchased equipment on January 1 2016 at a total invoice cost of $336000; additional costs of $6000 for freight and $30000 for installation were incurred. The equipment has an estimated salvage value of $12000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31 2017 if the straight-line method of depreciation is used is:

Question

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The total cost of the equipment is $336,000 + $6,000 + $30,000 = $372,000. The annual depreciation using the straight-line method is ($372,000 - $12,000) / 5 = $72,000. For two years, the accumulated depreciation is $72,000 * 2 = $144,000.

Mather Company Purchased Equipment on January 1 2016 at a Total