Question:
On January 1, year 1, Marino moving company paid $48,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of accumulated depreciation shown on the year 2 balance sheet is
Answer:
Depreciation = Purchase Cost – Salvage Value
= $48,000 – $8,000
= $40,000
Accumulated depreciation = Depreciation * Years
= $40,000 * 2/4 Years
= $20,000
The amount of accumulated depreciation shown on the year 2 balance sheet is $20,000
Related Questions:
- On January 1, year 1, Marino moving company paid $48,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of book value shown on the year 2 balance sheet is
- On January 1, year 1, Marino moving company paid $48,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of depreciation expense recognized on the year 2 income statement is
- On January 1, year 1, Raven Limo service, incorporated paid $64,000 cash to purchase a limousine. The limo was expected to have a six-year useful life and a $10,000 salvage value. On January 1, year 5 the limo was sold for $30,000 cash. Assuming Raven uses straight-line depreciation, the company would recognize a