Atruck costs $16,000 with a residual value of $1,000. it has an estimated useful
life of five years. if the truck was bought on july 3, what would be the book
value at the end of year 1 using straight-line rate?
a. $1,500
b. $16,000
c. $12,500
d. $14,500

Option D.

Step-by-step explanation:

Cost of truck = $16000

Residual value after 5 years = $1000

Depreciated value of a truck in 5 year is

In straight-line method, the value of a fixed asset depreciate by a constant rate.

Since depreciation of truck in 5 years is $15000, therefore, the depression of one year is

1 year Depreciation =

From July 3 to end of fist year = 1/2 year

1/2 year Depreciation =

So, the value at the end of year 1 using straight-line rate is

Therefore, the correct option is D.