Answer:
The amount of accumulated depreciation shown on the Year 3=$38,000
Explanation:
Depreciable cost=asset cost-salvage value
where;
asset cost=$48,000
salvage value=$8,000
replacing;
depreciable cost=48,000-8,000=$40,000
The depreciation rate per unit=depreciable cost/planned number of units
where;
depreciable cost=$40,000
planned number of units=100,000 miles
replacing;
depreciation rate per unit=40,000/100,000=$0.4 per mile
depreciation expense for year 1=depreciation rate per unit×actual miles driven
depreciation rate per unit=$0.4
actual miles driven=40,000 miles
replacing;
depreciation expense for year 1=(0.4×40,000)=$16,000
depreciation expense for year 2=depreciation rate per unit×actual miles driven
depreciation rate per unit=$0.4
actual miles driven=20,000 miles
replacing;
depreciation expense for year 2=(0.4×20,000)=$8,000
depreciation expense for year 3=depreciation rate per unit×actual miles driven
depreciation rate per unit=$0.4
actual miles driven=35,000 miles
replacing;
depreciation expense for year 3=(0.4×35,000)=$14,000
depreciation expense for year 4=depreciation rate per unit×actual miles driven
depreciation rate per unit=$0.4
actual miles driven=10,000 miles
replacing;
depreciation expense for year 4=(0.4×10,000)=$4,000
Accumulated depreciation on year 3=depreciation expense for year 1+depreciation expense for year 2+depreciation expense for year 3
accumulated depreciation on year 3=(16,000+8,000+14,000)=$38,000
The amount of accumulated depreciation shown on the Year 3=$38,000
