On January 1, 2012, Benson Company purchased a machine for $1,200,000 and deprec

Question

On January 1, 2012, Benson Company purchased a machine for $1,200,000 and depreciated it by the straight-line method with an estimated list of ten years and a salvage value of $100,000. On January 1, 2017 Benson determined that the machine had a useful life of eight years from the date of acquisition and will have a salvage value of $200,000. An accounting change was made in 2017 to reflect these additional data. What is the accumulated depreciation credit balance for this machine as of December 31, 2017?

Explanation / Answer

Straight line dep = (1200000-100000/10) = 110000 per year

2012 to 2016 accumlated dep = 110000*5 = 550000

2017 Depreciation = (1200000-550000-200000/3) = 150000

Accumlated depreciation on december 31,2017 = (550000+150000) = $700000

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.