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On 1 January 2013, a Company Buys a Truck for $42

Question 41

Multiple Choice

On 1 January 2013, a company buys a truck for $42 000 cash. It has estimated residual value of $2 000, and an estimated life of 4 years, or 200 000 kilometres. Assume the company uses units- of- production depreciation. The truck drove 40 000 kilometres in 2013, 60 000 kilometres in
2014, 80 000 kilometres in 2015, and 20 000 kilometres in 2016. What is the depreciation rate?


A) $0.21/per kilometre
B) $4.00/per kilometre
C) $0.20/per kilometre
D) $0.25/per kilometre

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