Question

Charlie's Chocolate Company acquired a new truck at at cost of $52,000 on January 1, 2019....

Charlie's Chocolate Company acquired a new truck at at cost of $52,000 on January 1, 2019. The truck is expected to be used for 4 years and have a salvage value of $8,000 at that time. The company uses the straight-line method to calculate depreciation.

#1. Calculate depreciation expense for 2019

#2 Calculate depreciation expense for 2020

#3 Calculate accumulated depreciation as of 12/31/2019

#4 Calculate accumulated depreciation as of 12/31/2020

#5 Calculate the book value as of 12/31/2020

(show your answers using this format: $xx,xxx (include the dollar sign)

Business   Accounting   
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Homework Answers

Answer #1

Depreciation Expense Formula : (Cost of Asset - Salvage Value) / Useful Life

= (52,000 - 8,000) / 4

= 44,000 / 4

= $11,000

Answer 1. Depreciation Expense for 2019 - $11,000 (calculated above)

Answer 2. Depreciation Expense for 2020 - $11,000 (calculated above)

The depreciation expense will remain same as straight-line method is being used.

Answer 3. Accumulated Depreciation as of 12/31/2019 - Depreciation Expense for 2019 = $11,000

Answer 4. Accumulated Depreciation as of 12/31/2020 = Depr Exp for 2019 + Depr Exp for 2020

= $11,000 + $11,000

= $22,000

Answer 5. Book Value as of 12/31/2020 = Original Cost - Accumulated Depreciation as of date

= $52,000 - $22,000

= $30,000

In case of any query/clarification please leave a comment below, if the answer was helpful please leave a thumbs up, thanks!

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