Question

On January 1, 2019, Rowley Company purchased a truck that cost $55,000. The truck had an expected useful life of 5 years and a $5,000 salvage value. The amount of depreciation expense on the 2019 Income Statement assuming that Rowley uses the straight line method is:

Group of answer choices

$10,000

$11,000

$5,000

None of these

2.

On January 1, 2018, Rowley Company purchased a truck that cost $50,000. The truck had an expected useful life of 5 years and no salvage value so the depreciable cost is $50,000. The amount of accumulated depreciation on the 2019 Balance Sheet is:

Group of answer choices

$10,000

$20,000

$30,000

$50,000

Answer 1

Q.1	Correct Option A i.e. $10000
	Depreciation Expense by SLM = (Original Cost - Salvage Value )/ Useful life
	=(55000 - 5000) / 5
	10,000
Q.2	Correct Option B i.e. $20000
	Depreciation Expense by SLM = (Original Cost - Salvage Value )/ Useful life
	=(50000 - 0) / 5
	10000
	Depreciation for 2018	10,000
	Depreciation for 2019	10,000
	The amount of accumulated depreciation	20,000