Norman Ltd purchased a motor vehicle for $45 000 on 1 July 2015.The vehicle was expected to have a four-year life span.The financial period ends on 30 June.
-Assuming Norman Ltd used the straight-line method of depreciation,the accumulated depreciation at 30 June 2017 was:

Question

Quizplus · Accepted Answer

The straight-line method of depreciation allocates an equal amount of the asset's depreciable cost over its expected useful life. Therefore, the annual depreciation expense will be $45,000/4 years = $11,250. Accumulated depreciation is the total amount of depreciation that has been recorded for the asset since its acquisition date. Since two years have passed since the acquisition date, the accumulated depreciation by 30 June 2017 would be $11,250 x 2 = $22,500. Therefore, the correct answer is C.

Norman Ltd Purchased a Motor Vehicle for $45 000 on 1