Maxine,Inc.bought a machine on January 1,2010 for $24,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2011?

Question

Quizplus · Accepted Answer

To calculate accumulated depreciation, we need to know the annual depreciation expense first. The machine was bought for $24,000 and is expected to last for 8 years, so the annual depreciation expense is:

$24,000 / 8 years = $3,000 per year

Now, we need to calculate the accumulated depreciation for 2 years (2010 and 2011). The formula to calculate accumulated depreciation is:

Accumulated Depreciation = Depreciation Expense x Number of Years

Accumulated Depreciation = $3,000 x 2 years = $6,000

Therefore, Maxine will report accumulated depreciation of $6,000 at December 31, 2011. Option D is correct.