what is the accumulated depreciation for a grinder bought 3/15/22 for 2000 dollars
The correct answer and explanation is:
Correct Answer:
Assuming straight-line depreciation over 5 years with no salvage value, the accumulated depreciation for a grinder bought on March 15, 2022 for $2,000 as of June 25, 2025 is $1,300.
Explanation:
Depreciation is the allocation of the cost of a tangible asset over its useful life. The most common method is the straight-line depreciation method, which spreads the expense evenly over the years of the asset’s useful life.
Step 1: Determine useful life and depreciation per year
If the grinder is expected to last 5 years and has no salvage value, the annual depreciation is: 20005=400 dollars per year\frac{2000}{5} = 400\ \text{dollars per year}
Step 2: Calculate the time elapsed
The grinder was purchased on March 15, 2022. The time between that date and June 25, 2025 is 3 years and about 3.3 months.
Breakdown:
- From March 15, 2022 to March 15, 2025 = 3 years
- March 15, 2025 to June 25, 2025 = 3.33 months ≈ 0.28 years
Total time = 3 + 0.28 = 3.28 years
Step 3: Multiply by annual depreciation 3.28×400=1,312 dollars3.28 \times 400 = 1,312\ \text{dollars}
Since accounting usually rounds to the nearest month or to the nearest dollar, and partial year depreciation is often prorated, the rounded accumulated depreciation is $1,300.
Note:
This calculation assumes:
- No salvage value
- Straight-line method
- Depreciation started in the month of purchase
- Prorated depreciation for partial years
If the company uses a different method (such as double-declining balance), salvage value, or different life span, the depreciation amount would change.