Porter, Inc., acquired a machine that cost $720,000 on October 1, 2010. The machine is expected to have a four-year useful life and an estimated salvage value of $80,000 at the end of its life. Porter, Inc., uses the calender year for financial reporting. Depreciation expense for one-fourth of a year was recorded in 2010.
a) Using straight-line depreciation method, calculate the depreciation expense to be recognized in the income statement for the year ended December 31, 2012, and the balance of the Accumulated Depreciation account as of December 31, 2012. (Note: This is the third calender year in which the asset has been used.)