A truck that cost $40,000 is at the end of year 3 of a useful life...
A truck that cost $40,000 is at the end of year 3 of a useful life of 5 years. It's estimated salvage value is $5,000. It's current carrying value is $19,000.
True
False
Homework Answers
| CALCULATION OF CARRYING VALUE OF TRUCK | |
| Cost price of Truck | $ 40,000 |
| Less: Salvage Value | $ 5,000 |
| Net Value for Depreciation | $ 35,000 |
| Usefule life of the Assets | 5 years |
| Depreciation per year = Value for Depreciation / 5 years = | $ 7,000 |
| Total Depreciation for 3 Years = $ 7,000 X 3 years | $ 21,000 |
| Carrying Value = Cost of Truck - Cumulative value of Depreciation | |
| Carrying Value = $ 40,000 - $ 21,000 | |
| Carrying Value = $ 19,000 | |
| IT means the given statement that truck's carrying value is $ 19,000 is correct | |
| Answer = True | |
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