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Cantona Manufacturing Co. purchased a machine on July 1, 2010, for $45,000. The machine has an estimated five year life with a salvage value of $5,000.
-Assuming Cantona uses straight-line depreciation, Accumulated Depreciation at the end of 2011 is

Question

Use the following information to answer questions 
Cantona Manufacturing Co. purchased a machine on July 1, 2010, for $45,000. The machine has an estimated five year life with a salvage value of $5,000.
-Assuming Cantona uses straight-line depreciation, Accumulated Depreciation at the end of 2011 is

Quizplus · Accepted Answer

The annual depreciation expense is calculated as (Cost - Salvage Value) / Useful Life = ($45,000 - $5,000) / 5 = $8,000 per year. Since the question asks for the accumulated depreciation at the end of 2011, which is 1.5 years after the purchase, the accumulated depreciation would be $8,000 per year * 1.5 years = $12,000.

Use the Following Information to Answer Questions