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 total depreciation over three years is $45,000 - $15,000 = $30,000. Annually, this is $30,000 / 3 = $10,000. By 30 June 2017, 1.5 years have passed, so the accumulated depreciation is $10,000 * 1.5 = $15,000.

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