Question

please provide your response to the nearest integer with no comma or $ sign. A small truck is purchased for $35,000. It is expected to be of use to the company for 6 years, after which it will be sold for $12,500. determine the depreciation deduction at the fifth year 'using SLN._________determine the book value at fifth year using SLN.___________

Answer 1

Using the straight-line method (SLN), the depreciation deduction at the fifth year would be $3750. The book value at the fifth year would be $16250.

Step-by-step explanation:

To determine the depreciation deduction at the fifth year using the straight-line method (SLN), we need to calculate the annual depreciation expense. The formula for SLN is (Initial Cost - Salvage Value) / Useful Life. In this case, the initial cost is $35,000, the salvage value is $12,500, and the useful life is 6 years. Plugging these values into the formula, we get (35000 - 12500) / 6 = $3750. Therefore, the depreciation deduction at the fifth year would be $3750.

To determine the book value at the fifth year using SLN, we need to subtract the accumulated depreciation up to the fifth year from the initial cost. The accumulated depreciation for each year with SLN can be calculated by multiplying the annual depreciation expense by the number of years. In this case, the accumulated depreciation at the fifth year would be 3750 * 5 = $18750. Therefore, the book value at the fifth year would be 35000 - 18750 = $16250.