Answer:
$14,620.00
Explanation:
Depreciation on a straight line is constant throughout the useful.
For able towing, depreciation expenses for 2012 and 2013 will be
Depreciable amount = cost price - salvage value
=$90,000- $18,000= $72,000
Depreciation will be $72,000 /10 years which will be $7200 per year
For two years will be $7200 x 2= $14,400
At the beginning of 2014, the book value will be $90,000 - $14,400=$ 75,600
new salvage value beginning 2014 is $2500
Depreciable amount is $75,600- $2,500=$73100
use-life life is 5 years.
The depreciation rate for 2014 is $73,100 /5 years
=$14,620.00
