Answer:
Accumulated depreciation at the end of year 2022 : $16,000
Explanation:
Activity based depreciation is whereby an asset is depreciated based on the asset’s activity such as the number of hours worked or the number of units produced, during a particular period of time. Activity based depreciation per year is calculated as:
[(Cost - Salvage value) x activity performed during the period] / Total estimated life activity of the asset
In 2021, the asset had an activity of 5000 miles. Depreciation for this year = [(65000 - 5000) x 5000] / 30,000
= $10,000
In 2022, the asset had an activity of 3000 miles. Depreciation for this year = [(65000 - 5000) x 3000] / 30000
= $6000
Accumulated depreciation at the end of year 22 : $10,000 + $6,000 = $16,000
