Question

On July 1, 2011, Hale Kennels sells equipment for $66,000. The equipment was originally purchased on July 1, 2007 at a cost $180,000, had an estimated 5-year life and an expected salvage value of $30,000. The company books depreciation annually. What is the balance in Accumulated Depreciation As of December 31, 2010

Answer 1

Answer:

Accumulated Depreciation As of December 31, 2010  = $105,000

Explanation:

Under the straight line method of depreciation, the cost of an asset less the salvage value is spread equally over the expected useful life.

Annual depreciation:

= (cost of assets - salvage value)/ 5 years

= (180,000 -30,000)/5

=.$30,000

From July 1 2007  to December 31 2010 = 3 years 6 months = 42 months

So total accumulated depreciation at the end of 3 years 6 months :

=  ( 30,000/12) ×  42

= $105,000

Accumulated Depreciation As of December 31, 2010 = = $105,000