Question

Several years ago, O’Leary’s Manufacturing purchased a new machine with an 8-year expected life for $68,400. On its current balance sheet, O’Leary’s lists accumulated depreciation on the machine at $51,300. Based on this, how much has the company expensed over the life of the asset? A : $51,300 B : $8,550 C : $17,100 D : $68,400

Answer 1

Answer:

Based on this, how much has the company expensed over the life of the asset? A : $51,300

Explanation:

                Cost   Annual Dep.  Accum. Expense Accum. Depre

Year 1      68400 8550 8550

Year 2  8550                 17100

Year 3  8550                 25650

Year 4  8550                 34200

Year 5  8550                 42750

Year 6  8550                 51300

Answer 2

Answer:

A) 51,300

Explanation:

Accumulated depreciation represents how much O’Leary’s Manufacturing has recorded over the years up to the current accountable period in expense. This is because on every accountable period the expense (Depreciation) is accumulated in this contra-asset account.