A truck that cost $19,200 and was expected to last 5 years was scrapped after 3 years. If the truck was being depreciated on a straight-line basis (with no salvage value), the book value of the truck at the time of disposal was

Question

Quizplus · Accepted Answer

Straight-line depreciation allocates equal amounts of the asset's depreciable cost across its useful life. In this case, the depreciable cost of the truck is $19,200, and since it was expected to last 5 years, the annual depreciation expense would be $19,200 / 5 years = $3,840 per year.

After 3 years, the accumulated depreciation would be 3 years x $3,840/year = $11,520. Therefore, the book value of the truck at the time of disposal would be $19,200 - $11,520 = $7,680.

Option D is the correct answer.

A Truck That Cost $19,200 and Was Expected to Last