Final answer:
The accumulated depreciation for the equipment as of December 31, 2015, using the straight-line method, is calculated by subtracting the salvage value from the equipment cost, dividing by the useful life to get the annual depreciation, and then multiplying by 2 years, resulting in $156,000.
Step-by-step explanation:
The question asks how to calculate the accumulated depreciation using the straight-line method for equipment that was purchased for $400,000, has a salvage value of $10,000, and a useful life of 5 years, as of December 31, 2015. To find the main answer, we first calculate the annual depreciation expense by subtracting the salvage value from the cost of the equipment and then dividing by the useful life Annual Depreciation Expense = (Cost - Salvage Value) / Useful Life = ($400,000 - $10,000) / 5 = $78,000.Next, since the equipment was purchased on January 1, 2014, and we need the accumulated depreciation as of December 31, 2015, we multiply the annual depreciation by 2 years:Accumulated Depreciation = Annual Depreciation Expense × Number of Years = $78,000 × 2 = $156,000.Conclusion Therefore, the accumulated depreciation on the equipment as of December 31, 2015, is $156,000.