A truck was purchased for $180,000 and it was estimated to have a $36,000 salvage value at the end of its useful life.Monthly depreciation expense of $3,000 was recorded using the straight-line method.The annual depreciation rate is

Question

Quizplus · Accepted Answer

The annual depreciation is $3,000 x 12 = $36,000. The depreciable amount is $180,000 - $36,000 = $144,000. The annual depreciation rate is ($36,000 / $144,000) x 100% = 25%.

A Truck Was Purchased for $180,000 and It Was Estimated