Rhoundakona Corporation bought property,plant,and equipment on January 1,2014,at a cost of $35,000.Estimated residual value is $5,000 and the estimated useful life is 8 years.The company uses straight-line depreciation.On January 1,2017,Rhoundakona's management sells the asset for $25,000.The balance in Accumulated Depreciation on January 1,2017,is:

Question

Quizplus · Accepted Answer

The annual depreciation is ($35,000 - $5,000) / 8 = $3,750. By January 1, 2017, 3 years of depreciation have occurred, so Accumulated Depreciation is 3 * $3,750 = $11,250.

Rhoundakona Corporation Bought Property,plant,and Equipment on January 1,2014,at a Cost