Question

A truck was purchased for $188000 and it was estimated to have a $32000 salvage value at the end of its useful life. Monthly depreciation expense of $2600 was recorded using the straight-line method. The annual depreciation rate is a.16,60% b.6.67% c.20.00% d.1.67%.

Answer 1

Answer: 20%

Step-by-step explanation: Annual depreciation = $2,600 * 12 = $31,200

Annual depreciation rate = Annual depreciation /Depreciable costs

= $31,200 / ($188,000 - $32,000)

= 20%