On January 1,2010,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.How much accumulated depreciation should the company report at December 31,2012?

Question

Quizplus · Accepted Answer

To calculate the accumulated depreciation, we first need to determine the annual depreciation expense.

Annual Depreciation Expense = (Cost of Asset - Residual Value) / Useful Life
In this case, the cost of the truck is $48,000, there is no residual value, and the useful life is 6 years.

Annual Depreciation Expense = ($48,000 - $0) / 6 = $8,000

Since the truck was bought on January 1, 2010, it was used for 3 full years at December 31, 2012. Therefore, the accumulated depreciation would be:

Accumulated Depreciation = Annual Depreciation Expense x Number of Years Used
Accumulated Depreciation = $8,000 x 3 = $24,000

So the answer is C) $24,000.