Depreciation expense to be recognised in year 1
Equipment cost =$80,000 Truck cost=$50,000
Salvage value=$10,000 salvage value=$5,000
Useful life=7 years useful life=5 years
Depreciation = (cost-salvage value)/useful life
Depreciation on equipment = (80000-10000)/7
= $10000 per year
Depreciation on Truck = (50000-5000)/5
=$9000 per year
1) So, total Depreciation expense to be recognised for year 1 is (10,000+9000) = $19,000.
2) Accumulated Depreciation on equipment at end of year 2 is $10,000*2= $20,000.
3) Accumulated Depreciation on truck at end of year 3 is $9000*3 =$27,000.
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