How to Calculate Accumulated Depreciation Balance

What is the balance in the Accumulated Depreciation account as of January 31, 2022? The balance in the Accumulated Depreciation account at January 31, 2022, would be $13,780 credit.

Calculating Accumulated Depreciation Balance

Accumulated Depreciation is a contra-asset account that shows the total amount of depreciation expense recognized to date for a depreciable asset. In this case, Sheffield Corp. purchased equipment for $26,500 on January 1, 2021, and is depreciating it at a rate of $1,060 per month.

To calculate the balance in the Accumulated Depreciation account as of January 31, 2022, we need to determine the total depreciation expense for the period from January 1, 2021, to January 31, 2022. This can be done by multiplying the monthly depreciation expense by the number of months the equipment has been in use.

Total Depreciation Expense = Monthly Depreciation * Number of Months

$1,060/month x 13 months = $13,780

Since depreciation is an expense, it is recorded with a debit balance. However, Accumulated Depreciation is a contra-asset account, meaning it has a normal credit balance. Therefore, the balance in the Accumulated Depreciation account as of January 31, 2022, would be $13,780 credited.

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