Highwire Company purchased a new machine on July 1st 2011 at

Highwire Company purchased a new machine on July 1st, 2011 at a cost of $200,000. The company estimated that the machine has a salvage value of $15,000. The machine is expected to be used for 40,000 working hours during it\'s 10-year life.

a) Using straightline method, provide $________ accumulated depreciation account balance at December 31st, 2013.

Solution

Solution: $55,500

Working:

2011 to 2013 = 3 years ($200,000 - $15,000) / 10 year = $18,500

$18,500 * 3 years = $55,500