Hotel-R-Us owns a machine that it purchased on Jan 1,2016 for $600,000.The machine had an estimated useful life of 5 years and an estimated residual value of $100,000.The company uses the declining balance method with a rate of 20%.The machine was sold on December 31,2018 for $140,000.What was the accumulated depreciation at December 31,2018?

Question

Quizplus · Accepted Answer

A)2016 depreciation = 600 × 20% = 120
2017 depreciation = (600 - 120)× 20% = 96
2018 depreciation = (600 - 120 - 96)× 20% = 76.8
Accumulated = 120,000 + 96,000 + 76,800 = 292,800

Hotel-R-Us Owns a Machine That It Purchased on Jan 1,2016