Question 2

On January 1, 2016, Wasson Company purchased a delivery vehicle costing $40,000. The vehicle has an estimated 6-year life and a $4,000 residual value. Wasson uses the units-of-production depreciation method and estimates that the vehicle will be driven 100,000 miles over its 6-year life. What is the vehicles book value as of December 31, 2017, assuming the vehicle was driven 10,000 miles during 2016 and 18,000 miles during 2017?

$29,920

$28,800

$25,920

$24,800