Question

a truck acquired at a cost of $595,000 has an estimated residual value of $34,000, has an estimated useful life of 60,000 miles, and was driven 6,000 miles during the year. determine the following. if required, round your answer for the depreciation rate to two decimal places. the depreciable cost $______

Answer 1

The depreciable cost of the truck is calculated by subtracting the estimated residual value from the acquisition cost, resulting in $561,000. This figure represents the amount that can be depreciated over the truck's useful life.

Step-by-step explanation:

The question is asking to calculate the depreciable cost of a truck for accounting purposes. To find this, subtract the estimated residual value from the original acquisition cost.


The calculation is as follows:

• Original cost of the truck = $595,000
  
  
  
• Estimated residual value = $34,000
  
  
• Depreciable cost = Original cost - Estimated residual value
  
  
• Depreciable cost = $595,000 - $34,000
  
  
• Depreciable cost = $561,000

The depreciable cost is the amount of the truck's value that can be allocated as expense over its useful life. When a company spreads the cost of an asset over the time it is expected to be used, it's known as depreciation, and it reflects the consumption of the asset.