Monthly depreciation expense of $600 is recorded on a truck that was purchased for $27,000 and has a $3,000 estimated salvage value

Accounting Mar 18, 2021

Monthly depreciation expense of $600 is recorded on a truck that was purchased for $27,000 and has a $3,000 estimated salvage value. The annual depreciation rate is:

a. 30%.

b. 25%.

c. 33%.

d. 27%.

Expert Solution

Answer:

a .

Step-by-Step explanation

Depreciation expense for 12 months = $600 * 12 = $7,200

Dep. Rate = $7,200 / ($27,000 - $3,000)

= 30%

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