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purchased equipment on January 1, 2018, at a total invoice cost of $1250000. The equipment has an estimated salvage value of $25000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2019, if the straight-line method of depreciation is used?

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Answer:

$489,000

Explanation:

Depreciation = (cost - salvage value)/estimated no of useful lives

Depreciation/year = ($1,250,000-$25,000)/5

                      = $1,225,000/5 = $244,500

Depreciation for 2018 = $244,500

Accumulated depreciation would also = $244,500 as this is the first year of purchase

Depreciation for 2019 = $244,500

Accumulated depreciation = $244,500 + $244,500 = $489,000

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