Carolina Truck Lines purchased a truck at a cost of $22,000 in 2008. As of January 1, 2013, depreciation of $18,000 had been recorded on this asset. Depreciation expense for 2013 is $2,000. Before the adjustments are recorded and posted at December 31, 2013, what is the truck's book value?

Question

Quizplus · Accepted Answer

The book value of the truck is calculated by subtracting the accumulated depreciation from the original cost. As of January 1, 2013, the accumulated depreciation is $18,000. Adding the 2013 depreciation expense of $2,000 gives a total accumulated depreciation of $20,000. Therefore, the book value is $22,000 - $20,000 = $2,000.

Carolina Truck Lines Purchased a Truck at a Cost of $22,000