Question

Depreciation of 2,600 must be recognized on a service truck purchased in July of the current year at a cost of24,000. What is the depreciation expense for the service truck?

1) $2,600
2) $24,000
3) Cannot be determined without additional information
4) None of the above

Answer 1

The depreciation expense for the service truck cannot be determined without additional information.

Step-by-step explanation:

To calculate the depreciation expense for the service truck, we need to determine the useful life of the truck and the depreciation method being used. Assuming the straight-line depreciation method is being used with a useful life of 10 years, we can calculate the depreciation expense as follows:

Depreciation Expense = (Cost - Salvage Value) / Useful Life

Depreciation Expense = ($24,000 - $0) / 10 = $2,400 per year.

Therefore, the correct answer is option 3) Cannot be determined without additional information.