Answer:
Accumulated depreciation= $16,000
Explanation:
Giving the following information:
Purchase price= $65,000
Useful life= 30,000 miles
Residual value= $5,000
2021= 5,000 miles
2022= 3,000 miles
To calculate the depreciation expense, we need to use the following formula:
Annual depreciation= [(original cost - salvage value)/useful life of production in miles]*miles operated
2021:
Annual depreciation= [(60,000/30,000)*5,000]
Annual depreciation= $10,000
2022:
Annual depreciation= 2*3,000= $6,000
Now, the accumulated depreciation:
Accumulated depreciation= 10,000 + 6,000= $16,000
