Question

A machine that costs $20,000 and has a 10-year life and a $2000 salvage value. If straight-line depreciation is used, what is the accumulated depreciation for the machine at the end of the 6th year?

Answer 1

Ans: The accumulated depreciation for the machine at the end of the 6th year is $10,800

Explanation:

Cost of the asset ( P ) = $20,000

Salvage value ( F ) = $2,000

Number of year ( n ) = 10

Annual depreciation amount = P - F / n

= ( $20,000 - $2,000) / 10

= $18,000 /10

= $ 1800

The accumulated depreciation for the machine at the end of the 6th year = $1800 * 6 = $10,800

End of the Year	Depreciation Amount	Book Value = Previous year book value - Current year depreciation amount
0	--	$20,000
1	1800	18200
2	1800	16400
3	1800	14600
4	1800	12800
5	1800	11000
6	1800	9200
7	1800	7400
8	1800	5600
9	1800	3800
10	1800	2000