Question

A company purchased a new delivery van at a cost of $58,000 on January 1. The delivery van is estimated to have a useful life of 4 years and a salvage value of $4,600. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the van during the first year ended December 31

Answer 1

Annual depreciation= $13,350

Step-by-step explanation:

Giving the following information:

Purchase price= $58,000

Useful life= 4 years

Salvage value= $4,600

To calculate the annual depreciation using the straight-line method, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (58,000 - 4,600) / 4

Annual depreciation= $13,350