At the beginning of Year 1, Fernbank Farms purchased a semi-trailer at a cost of $100,000....
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At the beginning of Year 1, Fernbank Farms purchased a semi-trailer at a cost of $100,000. The truck has an estimated life of five years and an estimated residual value of $20,000, and it will be depreciated using the straight-line method. On January 1, Year 3, the company made $30,000 worth of repairs to the truck that extended its life by 3 years. Thus, starting with Year 3, the truck has a remaining life of five years and a new salvage value of $8,000. What amount should be recorded as depreciation expense each year starting in Year 3? a. $12,400 b. $13,600 C. $16,000 d. $18,000 At the beginning of Year 1, Fernbank Farms purchased a semi-trailer at a cost of $100,000. The truck has an estimated life of five years and an estimated residual value of $20,000, and it will be depreciated using the straight-line method. On January 1, Year 3, the company made $30,000 worth of repairs to the truck that extended its life by 3 years. Thus, starting with Year 3, the truck has a remaining life of five years and a new salvage value of $8,000. What amount should be recorded as depreciation expense each year starting in Year 3? a. $12,400 b. $13,600 C. $16,000 d. $18,000
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Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
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