Question
In: Accounting
Utley Corp purchased a new truck on January 1, 2013. The truck cost $30,000, has an...
Utley Corp purchased a new truck on January 1, 2013. The truck cost $30,000, has an estimated life of eight years, and has an estimated residual value of $6,000. Utley Corp uses the double-declining-balance method to compute depreciation.
14.value: 3.00 pointsRequired information What is Utley Corp's adjusted balance in its Accumulated Depreciation account at the end of 2014?
$13,125.
$3,750
$11,250.
$1,875
Solutions
Expert Solution
$13,125
Working:
| a. | Straight line rate | = | 1/8 | = | 12.50% | |||||||||
| Double declinig rate | = | 2*12.5% | = | 25.00% | ||||||||||
| b. | Depreciation Schedule: | |||||||||||||
| Year | Beginning Book Value | Depreciation rate | Depreciation Expense | Ending Book Value | ||||||||||
| a | b | c=a*b | d=a-c | |||||||||||
| 2013 | $ 30,000 | 25.00% | $ 7,500 | $ 22,500 | ||||||||||
| 2014 | $ 22,500 | 25.00% | $ 5,625 | $ 16,875 | ||||||||||
| c. | ||||||||||||||
| Calculation of Accumulated depreciation: | ||||||||||||||
| Year | Beginning Accumulated depreciation | Depreciation Expense | Ending Accumulated depreciation | |||||||||||
| 2013 | 0 | $ 7,500 | $ 7,500 | |||||||||||
| 2014 | $ 7,500 | $ 5,625 | $ 13,125 | |||||||||||
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B Company
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days 39.9
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