Charterhouse Services purchased a van on 1 January 2013, for $56 000. It has an estimated life of 5 years, and an estimated residual value of $6 000. Charterhouse uses straight- line depreciation. At the end of 2014, what was the carrying amount of the asset?

Question

Quizplus · Accepted Answer

The annual depreciation is ($56,000 - $6,000) / 5 = $10,000. After 2 years, the total depreciation is $20,000. The carrying amount is $56,000 - $20,000 = $36,000.

Charterhouse Services Purchased a Van on 1 January 2013, for $56