Question

Ann Torbert purchased a truck for $11,000 on January 1, 2014. The truck will have an estimated salvage value of $1,000 at the end of 5 years. Using the units-of-activity method, the balance in accumulated depreciation at December 31, 2015, can be computed by the following formula: ________

Answer 1

`Balance in accumulated depreciation=(10000)/(Total Estimated Value)*Units of activity`

Explanation:

Salvage value=$1000

Purchased value=$11,000

In order to find the balance in accumulated depreciation at december 31,2015 using the units of activity we will use the following formula:

`Balance in accumulated depreciation=(10000)/(Total Estimated Value)*Units of activity`

In the above equation $10000 came from Purchased value - salvage Value