Question

Sunland Company purchased a depreciable asset for $725000 on April 1, Year 15. The estimated salvage value is $68000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. What is the balance in accumulated depreciation on May 1, Year 18 when the asset is sold

Answer 1

$405,458

Step-by-step explanation:

Date of acquisition - 01/04/2015

Date of disposal - 01/05/2018

Time line - 3years 1 month

Useful life - 5years

Salvage value - $68000

Depreciation method - Straight line

Cost of Asset - $725,000

Annual Depreciation = (725000-68000)/5 =657,000/5 = 131500

Accumulated depreciation = (131500*3) + 131500/12

$394,500+10,958