Homework Answers
Accumulated depreciation expense = Cost - salvage value
= $20,000 - $2,000
= $18,000
Depreciation expense (2018) = (Miles during 2018 / Total miles driven) * Accumulated Depreciation
= (10,000 / 100,000) * $18,000
= $1,800
Book value at the end of year 2018 = Cost - Depreciation
= $18,000 - $1,800
= $16,200
Depreciation expense (2019) = (Miles during 2019/ Total miles driven) * Accumulated Depreciation
= (1,800 / 100,000) * $18,000
= $3,240
Book value at the end of year 2019 = $16,200 - $3,240
= $12,760
$12,760 is the correct answer.
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