A machine is purchased for $130 000.It is estimated that it has a useful life of 8 years and will then be sold for $10 000.Using the straight-line method the balance in the accumulated depreciation account at the end of the third year of the machine's useful life is:
A)$120 000
B)$45 000
C)$48 750
D)$15 000

Question

Quizplus · Accepted Answer

The annual depreciation expense using the straight-line method is calculated as (Cost - Salvage Value) / Useful Life = ($130,000 - $10,000) / 8 = $15,000. After three years, the accumulated depreciation is 3 * $15,000 = $45,000.

A Machine Is Purchased for $130 000