Answer:
The amount of accumulated depreciation at the end of the second year is $49,700.
Explanation:
<u>Determining the depreciable cost </u>
Determine the depreciable cost = Acquisition - Residual value.
The depreciable cost = 140,000 - 10,000.
The depreciable cost = $130,000.
<u>Determining the depreciation rate per unit </u>
The depreciation rate per unit = depreciable cost / No. of activity units
replacing:
The depreciation rate per unit= 130,000 / 80,000
The depreciation rate per unit= $1.6 per activity unit.
<u>Determining the amount of accumulated depreciation </u>
The depreciation expense for year 1= Activity units in year 1 × depreciation rate per unit.
The depreciation expense for year 1 = 17,000 × 1.6
The depreciation expense for year 1 = $27,200.
The depreciation expense for year 2= Activity units in year 2 × depreciation rate per unit.
The depreciation expense for year 2 = 15,000 × 1.6.
The depreciation expense for year 2 = $22,500.
The amount of accumulated depreciation = depreciation expense for year 1 + depreciation expense for year 2.
The amount of accumulated depreciation = 27,200 + 22,500.
The amount of accumulated depreciation = $49,700.
