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help please ! short answer question that im stuck on

ord. Connect - Sign In Saved Help Save & Exit On January 1 year 1. Castile, Inc. purchased (1) equipment with a cost of $80,000, salvage value of $10,000, and a useful life of 7 years, and (2) a truck with a cost of $50,000, salvage value of $5,000, and useful life of 5 years, 1. What is the amount of total depreciation expense that Castile, Inc. will recognize on its financial statements in year 1? 2. At the end of year 2, what is the amount of accumulated depreciation with respect to the equipment? 3. At the end of year 3, what is the amount of accumulated depreciation with respect to the truck? Short Answer Toolbar navigation BI VSE 13. A. A This question will be sent to your instructor for grading Prey 40 43 Next > a I o 3 * 994 to search hp

Answer 1

Depreciation expense to be recognised in year 1

Equipment cost =$80,000                                   Truck cost=$50,000

Salvage value=$10,000                                       salvage value=$5,000

Useful life=7 years                                               useful life=5 years

Depreciation = (cost-salvage value)/useful life

Depreciation on equipment    = (80000-10000)/7

                                                     = $10000 per year

Depreciation on Truck            = (50000-5000)/5

                                                    =$9000 per year

1) So, total Depreciation expense to be recognised for year 1 is (10,000+9000) = $19,000.

2) Accumulated Depreciation on equipment at end of year 2 is $10,000*2= $20,000.

3) Accumulated Depreciation on truck at end of year 3 is $9000*3 =$27,000.