Accounting Question

Question

Pryce Company owns equipment that cost $70,200 when purchased on January 1, 2017. It has been depreciated using the straight-line method based on estimated salvage value of $4,700 and an estimated useful life of 5 years. Sold for $34,300 on May 1, 2020. What is the Accumulated Depreciation-Equipment and Depreciation Expense

Answer 1

Dep for 1 year on = Cost- Scrap / No. of years

70200-4700/5=13100

Dep for first 3 years till 31 dec 2019 = 13100 x 3 = 39300

Dep for 4 months on 1 may 2020 = 13100 x 4/12 = 4366.66

Accumulated Depreciation = 39300 + 4367 = 43667 (approx. reounded at 10)

Depreciation Expense for the year 2020 = 4367(approx)