Question

Novak Corp. acquires a delivery truck at a cost of $61,000 on January 1, 2022. The truck is expected to have a salvage value of $15,500 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.​

Answer 1

Annual depreciation for the delivery truck using the straight-line method is $11,375 for both the first and second years.

Step-by-step explanation:

The student has asked how to compute the annual depreciation for the first and second years using the straight-line method for a delivery truck.

To calculate this, you would subtract the salvage value from the cost of the truck, and then divide by the useful life of the truck.

Since Novak Corp. acquired the truck at a cost of $61,000 with an expected salvage value of $15,500 after 4 years, the calculation would be as follows:

• Depreciable amount = Cost - Salvage value = $61,000 - $15,500 = $45,500
• Annual Depreciation = Depreciable amount / Useful life = $45,500 / 4 years = $11,375 per year

Therefore, the annual depreciation for the first and second years would be $11,375.