Question

Juanita purchased a forklift for $23,000 to move materials in her warehouse. The salvage value of the forklift is $3,150, and its useful life is 10 years. How much will Juanita write off as a depreciation expense each year for the forklift?

Answer 1

$1,985

Explanation:

To find the depreciation value we use this formula:

`(Purchase Price-Salvage Value)/(Estimated Useful Life)`

PP = 23,000

SV = 3,150

EUL = 10

`(23000-3150)/(10)`

This will give us:

$1,985

So Juanita will write $1,985 for the depreciation expense each year for the forklift.