Question

On Jan 1, 2011, Grills and Grates Inc. purchased equipement for $45,000. The company is depreciating the equipment at the rate of $600 per month. At Jan 31, 2012, the balance in Accumulated Depreciation is

Answer 1

Answer:

Balance in Accumulated Depreciation = $7,800

Explanation:

Time period from investment to the date i.e. from Jan 1, 2011 to Jan 31, 2012 = 13 months.

Provided monthly depreciation = $600

Depreciation for 13 months = $600 $\times$ 13 = $7,800.00

Therefore balance of accumulated depreciation as on the date January 31, 2012 = $7,800.00

This is because depreciation is not written off until the asset is permanently disposed off.

Final Answer

Balance in Accumulated Depreciation = $7,800