Tucker Truck Company acquired a delivery truck on January 4,2010.The total cost of the truck was $71,000.Tucker estimated that the truck would be used for 4 years before being sold for an estimated $7,500.Tucker uses the double-declining balance method of depreciation.The balance in the accumulated depreciation account on January 2,2013 will be:

Question

Quizplus · Accepted Answer

Using the double-declining balance method, the annual depreciation can be calculated as follows:

First-year depreciation = (2/4) x $71,000 = $35,500 
Second-year depreciation = (2/4) x ($71,000 - $35,500) = $17,750 
Third-year depreciation = (2/4) x ($71,000 - $35,500 - $17,750) = $8,875

Therefore, the balance in the accumulated depreciation account on January 2, 2013, which marks the end of the third year, can be calculated as follows:

Accumulated depreciation = $35,500 + $17,750 + $8,875 = $62,125

Hence, the correct answer is B.

Tucker Truck Company Acquired a Delivery Truck on January 4,2010