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martinez company acquires a delivery truck at a cosst of 60,000 on jan 1 2022. the truck is expected to have a salvage value of 14,000 at the end of its 10 year useful list Compute annual depreciation expense for the first and second years using the straight-line method.

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tutorconsortium609

Annual Depreciation expense year 1 = $4600, year 2 = $4600.

What is depreciation?

  • The book value of the fixed assets is decreased through depreciation.
  • Assets depreciate over time as a result of wear and tear and technological advancements. Depreciation will continue as long as the assets are still in use.

How do I calculate annual depreciation?

The given data is,

cost of the truck=60,000

salvage value= 14,000

Useful life of year=10 year.

Depreciation under  straight-line method=[tex]\frac{cost- salvage value}{useful life of year}[/tex]

=[tex]\frac{60,000 - 14000}{10}[/tex]

Depreciation for the first and second year= 4600 per annum

Annual Depreciation expense year 1 = $4600, year 2 = $4600.

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