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Tamiku [17]
2 years ago
15

A company purchased a new delivery van at a cost of $45,000 on July 1. The delivery van is estimated to have a useful life of 6

years and a salvage value of $3,000. 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?
Health
2 answers:
vovangra [49]2 years ago
8 0

Answer:

$3,500

Explanation:

Date of purchase is 1 July

Cost = $45,000

Salvage value = $3,000

Useful life = 6 years

Annual depreciation = ($45,000 - $3,000) / 6

                                  = $42,000/6

                                  = $7,000

However, the asset was only used for 6 months (between 1 July and December 31)

Hence depreciation expense to be recorded for the first year

= $7,000/2

= $3,500

podryga [215]2 years ago
3 0
<h2>Answer</h2>

Depreciation expense = $3500

<h2>Explanation</h2>

The van's purchase price = $45,000

It's salvage value = $3,000

<em>Subtract the salvage value from the purchase price to find the depreciable cost.</em>

Depreciation value = 45,000 - 3000

                              = $42000

<em>Divide the depreciable cost by the asset's lifespan to get the depreciation.</em>

Depreciation         = Depreciation value / useful life

                              = 42000 / 6

                              = $7000 per year

from July 1 - dec 31 =6 months

                              = 7000/2 (12/6 = half year)

                              = $3500

<h2>Depreciation expense = $3500</h2>

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