Question

On January 1, Year 1 Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the journal entry required to recognize depreciation expense at the end of Year 2 is Multiple Choice Credit Recount Titles Depreciation Expense Necumulated Depreciation Debit 20.000 20,000 Credit Account Titles Accumulated Depreciation Depreciation Expense Debit 10.000 10.000 Part 2 of 6 Credit Account Titles Depreciation Expense Accumulated Depreciation Debit 20,000 20,000 points eBook Credit Ask Account Titles Accumulated Depreciation Depreciation Expense / Debit 10.000 Print 10,000 References Credit Account Titles Depreciation Expense Accumulated Depreciation Debit 10.000 10,000 Credit Account Titles Accumulated Depreciation Depreciation Expense Debit 20.000 20,000

Answer 1

Step-by-step explanation:

The computation of the depreciation expense is shown below:

= (Purchase value of truck - salvage value) ÷ (expected useful life)

= ($48,000 - $8,000) ÷ (4 years)

= ($40,000) ÷ (4 years)

= $10,000

Under this straight-line method, the depreciation expense would remain the same for the expected useful life or the remaining life

Now the journal entry for year 2 is

Depreciation Expense A/c Dr $10,000

To Accumulated Depreciation - Truck A/c $10,000

(Being depreciation expense is recorded)