Table of contents

Skip topic navigation

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Depreciation

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Depreciation

Previous problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

On January 1, 1989 XYX Company purchased a machine for $180,000 in cash. The company estimated a nine year useful life with no salvage value. After the correct entries are made, what will be the balance in the Accumulated Depreciation account on December 31, 1992?

$20,000

$60,000

$80,000

$180,000

Previous problem

Verified step by step guidance

Determine the cost of the machine, which is $180,000.

Identify the useful life of the machine, which is estimated to be 9 years.

Since there is no salvage value, the entire cost of the machine will be depreciated over its useful life.

Calculate the annual depreciation expense using the straight-line method: Annual Depreciation = Cost / Useful Life = $180,000 / 9 years.

Calculate the accumulated depreciation by December 31, 1992, which is 4 years after the purchase: Accumulated Depreciation = Annual Depreciation * Number of Years = (Cost / Useful Life) * 4.