Question

Depreciation was recorded on the truck using the straight-line method. Assume a useful life of five years and a salvage value of $8,000. What is the annual depreciation expense?

1) 1,600
2) 1,200
3) 2,000
4) 2,400

Answer 1

The annual depreciation expense for the truck using the straight-line method is $0.

Step-by-step explanation:

To calculate the annual depreciation expense using the straight-line method, subtract the salvage value from the original cost of the truck and then divide it by the useful life.

Original cost of the truck = $8,000

Salvage value = $8,000

Useful life = 5 years

Depreciation expense = (Original cost - Salvage value) / Useful life

Depreciation expense = ($8,000 - $8,000) / 5 = $0 / 5 = $0

The annual depreciation expense is $0.