Machiel Manufacturing acquired a $60,000 machine on January 1,2009.The machine is estimated to have a useful life of 4 years,and a residual value of $10,000.For units-of-production depreciation purposes,the machine is expected to produce 500,000 units.If Machiel Manufacturing uses straight-line depreciation,what is the balance in the accumulated depreciation account on January 1,2011?
A)$14,400
B)$16,000
C)$17,600
D)$21,600
E)$25,000

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation by subtracting the residual value from the cost and dividing by the useful life. For this machine: ($60,000 - $10,000) / 4 = $12,500 per year. By January 1, 2011, two years of depreciation have occurred: 2 * $12,500 = $25,000.

Machiel Manufacturing Acquired a $60,000 Machine on January 1,2009