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On January 2, 2019, Kaiman Corporation acquired equipment for $700,000. The estimated life of the equipment...

On January 2, 2019, Kaiman Corporation acquired equipment for $700,000. The estimated life of the equipment is 5 years or 80,000 hours. The estimated residual value is $40,000. What is the balance in Accumulated Depreciation on December 31, 2020, if Kaiman Corporation uses the Straight −line method of depreciation?

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Answer #1

--Accumulated Depreciation on 31 Dec, 2020 = 2 years' depreciation

A Cost $          700,000.00
B Residual Value $            40,000.00
C=A - B Depreciable base $          660,000.00
D Life [in years] 5
E=C/D Annual SLM depreciation $          132,000.00

--Correct Answer = $ 132,000 x 2 years = $ 264,000

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