Help please and can show correct answer **Depreciation Analysis of a Truck**A truck is purchased for $22,500 and has a resale value of $16,500 after a useful life of 5 years. Using a book value depreciation chart, calculate the number of years until the book value of the truck is $17,700.**Options:**- A. 1 year- B. 2 years- C. 3 years- D. 4 years---**Explanation:**To solve this problem, you will need to understand the concept of depreciation and how to apply it to calculate the book value of an asset over time.1. **Initial Purchase Price**: $22,5002. **Resale Value after 5 Years**: $16,500Depreciation is calculated using the following formula:\[ \text{Depreciation per year} = \frac{\text{Initial Purchase Price} - \text{Resale Value after Useful Life}}{\text{Useful Life}} \]Thus, the yearly depreciation amount can be calculated as:\[ \text{Depreciation per year} = \frac{22,500 - 16,500}{5} = \frac{6,000}{5} = 1,200 \]Using this information, we can determine the book value of the truck after each year.- **After 1 Year**: \[ \text{Book Value} = 22,500 - 1,200 = 21,300 \] - **After 2 Years**: \[ \text{Book Value} = 21,300 - 1,200 = 20,100 \] - **After 3 Years**: \[ \text{Book Value} = 20,100 - 1,200 = 18,900 \] - **After 4 Years**: \[ \text{Book Value} = 18,900 - 1,200 = 17,700 \]From this calculation, you can see that the truck reaches a book value of $17,700 after 4 years.**Answer:**- D. 4 years**Source:**© 2022 International Academy of Science. All Rights Reserved.

Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…

A truck is purchased for $22,500 and has a resale value of $16,500 after a useful life of 5 years. Using a book value depreciation chart, calculate the number of years until the book value of the truck is $17,700. B. 2 years A. 1 year C. 3 years D. 4 years

A truck is purchased for $22,500 and has a resale value of $16,500 after a useful life of 5 years. Using a book value depreciation chart, calculate the number of years until the book value of the truck is $17,700. B. 2 years A. 1 year C. 3 years D. 4 years

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PA: Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and...

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