Delta Ltd purchased a motor vehicle for $45 000 on 1 January 2016.The vehicle was expected to have a life of three years and an estimated disposal value of $15 000.The straight-line method of depreciation is employed and the financial year ends on 30 June.
- What was the balance of the accumulated depreciation account at 30 June 2017?

Question

Quizplus · Accepted Answer

The vehicle's cost is $45,000 with a residual value of $15,000, giving a total depreciable amount of $30,000 over 3 years. Annually, this is $10,000 ($30,000 / 3). By 30 June 2017 (1.5 years), the accumulated depreciation is $15,000 ($10,000 per year * 1.5 years).

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