Avatar,Inc.bought a machine on January 1,2011 for $96,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Avatar report at December 31,2012?

Question

Quizplus · Accepted Answer

The straight-line depreciation method would be used to calculate the depreciation per year, which is calculated as (cost of the asset - salvage value) / useful life. 
Depreciation per year = ($96,000 - $0) / 8 years = $12,000 per year 
To find the accumulated depreciation for 2012, we need to calculate the depreciation expense for 2011 and 2012 and add them together. 
Depreciation expense for 2011 = $12,000 
Depreciation expense for 2012 = $12,000 
Accumulated depreciation for 2012 = Depreciation expense for 2011 + Depreciation expense for 2012 = $12,000 + $12,000 = $24,000. 
Therefore, Choice D ($24,000) is the correct answer.