Question

# A machine that costs \$20,000 and has a 10-year life and a \$2000 salvage value. If...

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?

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

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