Question

Bramble Company purchased equipment on January 1, 2018 at a total invoice cost of $347000; additional costs of $5000 for freight and $32000 for installation were incurred. The equipment has an estimated salvage value of $11000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31, 2019 if the straight-line method of depreciation is used is:__________
a. $153600.
b. $136400.
c. $134400.
d. $149200.

Answer 1

Answer:

d. $149200.

Explanation:

Depreciation is a method used in expensing the cost of an asset.

Deprecation expense using the straight line method = (Cost of asset - Salvage value) / useful life

Cost of asset = $347,000 + $5,000 + $32,000 = $384,000

( $384,000 - $11,000) / 5 = $74,600

Deprecation expense each year would be $74,600.

Accumulated depreciation in 2019 would be the sum of deprecation expense in 2018 and 2019

$74,600 × 2 = $149,200

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