If an asset was purchased on January 1 2015 for 100000 with

If an asset was purchased on January 1, 2015 for $100,000 with an estimated life of 4 years, what is the accumulated depreciation at December 31, 2018? Multiple Choice $25,000 $100,000. $50,000. $75,000

Solution

The depreciation is = Machine value/ estimated years of life

which means = 100000/4=25000 per annum

The machine was purchased on 1st Jan 2015, the value of accumulated depreciation 31st December 2018 is,

=25000 * 4 (years-i.e., 2015, 2016, 2017 & 2018)

=100000, hence the answer is $ 100,000.