What would be the amount of accumulated depreciation

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Question - Brecks Ltd purchased a new truck 1 July 2017. The truck cost $42,000, the truck needed to be fitted with a tip tray to make it useful for the business costing $8,000. With the new fit out it was estimated that the vehicle would have a useful life of eight (8) years and a salvage value of $10,000.

Required -

a. What is the cost of the vehicle to Brecks Ltd?

b. What would be the amount of accumulated depreciation and the carrying value of the asset at the 30 June 2020, if we were to use the straight-line depreciation method?

c. What would be the amount of accumulated depreciation and the carrying value of the asset at the 30 June 2020, if we were to use the diminishing balance method of depreciation?

d. If we sold the vehicle for $20,000 at the 30 June 2020 what profit or loss would occur under b. and c.?

e. In your words, what do we mean by 'depreciable amount'?

Reference no: EM133016811

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