Question

Marigold Corp. purchased a truck at the beginning of 2020 for $109700. The truck is estimated to have a salvage value of $4200 and a useful life of 123000 miles. It was driven 22000 miles in 2020 and 30000 miles in 2021. What is the depreciation expense for 2020

Answer 1

the depreciation expense of the year 2020 is $18,870

Step-by-step explanation:

The computation of the depreciation expense of the year 2020 is as follows:

= (Truck value - salvage value) ÷ (useful life) × (driven miles)

= ($109,700 - $4,200) ÷ (123,000 miles) × (22,000 miles)

= $18,870

Hence, the depreciation expense of the year 2020 is $18,870