Answer:
The accumulated depreciation account at the end of the third year is $127,500
Explanation:
Accumulated depreciation is the amount of depreciation which is accumulated against each years depreciation and carried until the disposal of the asset. This account will be closed on the disposal of the asset with cost of the asset.
Original Cost of Oven = $455,000
Estimated Service Life = 10 years
Estimated Residual Value = $30,000
Formula for straight line depreciation is
Depreciation per year =( Cost of Asset - residual value ) / useful life
Depreciation per year = ( $455,000 - $30,000 ) / 10 years
Depreciation per year = 42,500 per year
As three years are passed, Accumulated depreciation will be
Accumulated Depreciation at the end of 3 years = $42,500 x 3 = $127,500