Royal Company Purchased a Dump Truck at the Beginning of 2014

question 173

Multiple Choice

Royal Company purchased a dump truck at the beginning of 2014 at a cost of $60,000.The truck had an estimated life of 6 years and an estimated residual value of $24,000.On January 1, 2016, the company made major repairs of $20,000 to the truck that extended the life 1 year.Thus, starting with 2016, the truck has a remaining life of 5 years and a new salvage value of $8,000.Royal uses the straight-line depreciation method.What amount should be recorded as depreciation expense each year starting in 2016?

• A) $6,000
• B) $12,000
• C) $13,600
• D) $14,400

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Definitions:

Circadian Rhythm

The biological clock that cycles daily, regulating physiological and behavioral processes such as sleep-wake patterns and hormone release.

24-Hour Cycle

Refers to the circadian rhythm, an internal biological clock that regulates the sleep-wake cycle and other physiological processes within a 24-hour period.

Electroencephalograph

An instrument that measures and records the electrical activity of the brain.

Electrical Activity

Refers to the movement of electrical charges or currents, often used in the context of neuronal or brain activities.