Exhibit 11-03
On January 1, 2016, Wheeler, Inc. purchased some equipment for $3,900. The equipment had an estimated life of five years and an expected residual value of $200. On July, 1, 2018, the equipment was sold for $1,000. Wheeler uses straight-line depreciation.
-Refer to Exhibit 11-03, what was the balance in the accumulated depreciation account prior to bringing the depreciation expense up to date before the disposal?

Question

Quizplus · Accepted Answer

The annual depreciation is ($3,900 - $200) / 5 = $740. By July 1, 2018, 2.5 years have passed, so accumulated depreciation is 2.5 * $740 = $1,850.

Exhibit 11-03 on January 1, 2016, Wheeler, Inc. Purchased Some Equipment for Equipment