Answer:
Option D.
Step-by-step explanation:
Cost of truck = $16000
Residual value after 5 years = $1000
Depreciated value of a truck in 5 year is
[tex]Depreciation=16000-1000=15000[/tex]
In straight-line method, the value of a fixed asset depreciate by a constant rate.
Since depreciation of truck in 5 years is $15000, therefore, the depression of one year is
1 year Depreciation = [tex]\dfrac{15000}{5}=3000[/tex]
From July 3 to end of fist year = 1/2 year
1/2 year Depreciation = [tex]\dfrac{3000}{5}=1500[/tex]
So, the value at the end of year 1 using straight-line rate is
[tex]Value=16000-1500=14,500[/tex]
Therefore, the correct option is D.
