Question

Roxy knows that she can deduct the depreciation expense of her ice cream delivery truck from her taxes over the truck’s useful life of 7 years. She can depreciate $2,100 per year. If she paid $19,000 to buy the truck, what is its salvage value?

A. $16,900


B. $8,500


C. $4,300


D. $3,400

Answer 1

C.$4,300

Explanation:

We are given that

Cost of truck=$19,000

Depreciation per year=$21,00

We have to find the salvage value.

Let salvage value=x

Formula:Depreciation per year=
`(C.P-salvage\;value)/(number\;of\;years)`

Using the formula

Substitute the values then we get

`2100=(19000-x)/(7)`

`2100* 7=19000-x`

`14700=19000-x`

`x=19000-14700`

`x=4300`

Hence, the salvage value=$4,300