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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?

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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
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