Question

A truck costing $80,000 has an expected life of 8 years. What is its written down value (closing value / closing balance / book value / carrying value) in 5 years?

a) $10,000

b) $20,000

c) $30,000

d) $40,000

Answer 1

The written down value, book value or carrying value of the truck in 5 years is $30,000.

Step-by-step explanation:

The written down value, also known as the book value or carrying value, of the truck in 5 years can be calculated by subtracting the accumulated depreciation from the original cost. Since the truck has an expected life of 8 years, the annual depreciation can be calculated as $80,000 / 8 = $10,000.

After 5 years, the accumulated depreciation would be $10,000 * 5 = $50,000. Therefore, the written down value of the truck in 5 years would be $80,000 - $50,000 = $30,000.

Thus, the correct answer is c) $30,000.