On January 1, Year 1, Marino Moving Company paid $64,000 cash to purchase a truck. The truck was expected to have a four year useful life and a $4,000 salvage value. If Marino uses the straight-line method, the accumulated depreciation shown on the Year 2 balance sheet is

Question

Quizplus · Accepted Answer

Straight-line method of depreciation is calculated as (Cost - Salvage value) / Useful life.

Using this formula, we can calculate the annual depreciation as follows:

($64,000 - $4,000) / 4 years = $15,000 per year

The accumulated depreciation for Year 2 can be calculated as 2 years x $15,000 per year = $30,000.

Therefore, the answer is (D) $30,000.

On January 1, Year 1, Marino Moving Company Paid $64,000