financial-accounting

Fabian Woodworks

This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2012, and was used 27,000 hours in 2012 and 26,000 hours in 2013.

Refer to Fabian Woodworks. If the company uses the straight-line method of depreciation, what is the book value at December 31, 2014 (after 3 years)?

$  4,000

$  6,000

$  8,000

$10,000