SBD Decided to Use Group Amortization for Its New Fleet

SBD decided to use group amortization for its new fleet of 10 panel delivery trucks. The trucks were purchased on January 1, 2013 at a cost of $12,000 each. The estimated useful life was 5 years and the estimated residual value was 10 percent of cost. Assume straight-line group amortization is used. SBD has a December 31 year-end and only accounts for amortization at year-end.
(a) At the end of 2013, amortization expense should be recorded in the amount of $____________________.
During 2014, three transactions occurred affecting the trucks:
(1) One truck was wrecked and the only recovery was $1,000 received from the salvage yard.
(2) Ordinary repair expenditures amounted to $700.
(3) A new truck was purchased at a cost of $12,200 on December 26.
(b) At the end of 2014, amortization expense should be recorded in the amount of $_____________________.

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(a) Compute amortization rate:
($120,000...

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