Blanton Company bought equipment on January 1, 2010 with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years.Due to obsolescence, it was determined at the beginning of 2014 that the useful life should be shortened by 3 years and the residual value changed to zero.What is the accumulated depreciation at the end of 2013?

Question

Quizplus · Accepted Answer

The annual depreciation using the straight-line method is ($160,000 - $40,000)/15 = $8,000. Accumulated depreciation for 4 years = $8,000 x 4 = $32,000. The change in useful life and residual value does not affect the calculation of accumulated depreciation for the first 4 years. Therefore, the accumulated depreciation at the end of 2013 is $32,000.

Blanton Company Bought Equipment on January 1, 2010 with a Cost