Question

A utility vehicle purchased by Knox Industries should last 110,000 miles. The acquisition cost was $21,400 and the salvage value is $1,926. Using the UOP depreciation method, given the annual usage information, calculate the accumulated depreciation at the end of year 2. (Round all dollar amounts to the nearest cent) YEAR MILES YEAR MILES 1 22,029 2 22,724 3 23,420 4 23,188

Answer 1

$7,922.91

Step-by-step explanation:

The computation of the accumulated depreciation at the end of year 2 is as followS:

But before that the depreciation rate is

= ($21,400 - $1,926) ÷ 110,000 miles

= 0.177

Now the first year depreciation is

= 0.177 × 22029

= $3,899.93

For year 2, it is

= 0.177 × 22,724

= $4,022. 97

So, the accumulated depreciation at the end of year 2 is

= $3,899.93 + $4022.97

= $7,922.91