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A construction company purchased a new bulldozer for $108 on January 1, 20X1. The company estimates that the bulldozer will have a useful life of 6 years and then be worthless. The company uses the straight-line depreciation method and makes adjusting entries annually. What balance would the construction company show in Accumulated Depreciation on December 31, 20X2 (after adjusting entries)

Respuesta :

Answer:

$36

Explanation:

The computation of the accumulated depreciation using the straight-line method is shown below:

= (Purchase value of new bulldozer - residual value) ÷ (estimated useful life)

= ($108 - $0) ÷ (6 years)

= ($108) ÷ (6 years)  

= $18

Since the depreciation expense is $18 per year but to find out the accumulated depreciation we have to multiplied it by 2 years i.e

= $18 × 2 years

= $36

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