XYZ Company purchased a new machine on January 1, 2020 for $160,000. The machine was assigned a 40-year life and a $3,000 residual value. XYZ Company will depreciate the machine using the double-declining balance depreciation method. Calculate the amount of accumulated depreciation related to the new machine that would appear in XYZ Company's December 31, 2023 balance sheet.

Accumulated depreciation at December 32, 2023 = 29679

Explanation:

machine = 160000

useful life = 40 years

residual value = 3000

straight-line depreciation rate = (160000 - 3000) : 40

= 3925 per year

Annual depreciation rate = 100% : 40 = 2.5%

double-declining rate = 2 * 2.5% = 5%

Depreciation for 2020 = 5% * 160000 = 8000

Depreciation for 2021 = 5% * (160000 - 8000) = 7600

Depreciation for 2022 = 5% * (160000 - 8000 - 7600) = 7220

Depreciation for 2023 = 5% * (160000 - 8000 - 7600 - 7220) = 6859

Accumulated depreciation at December 32, 2023

= 8000 + 7600 + 7220 + 6859

= 29679