Question
In: Accounting
How much depreciation expense will be recorded for the van during the first year ended December 31
A company purchased a new delivery van at a cost of $62,000 on July 1. The delivery van is estimated to have a useful life of 5 years and a salvage value of $5,000. 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
(a) $6,200
(b) $5,700
(c) $6,000
(d) $11,400
(e) $6,700
Solutions
Expert Solution
Calculation of Depreciation Expense
Given information in the problem
Cost of new delivery van = $62,000
Salvage value of delivery van = $5,000
Useful life of delivery van = 5 Years
Formula for calculating Depreciation Expense
Depreciation Expense = Cost - Salvage Value / Useful Life
= $62,000 - $5,000 / 5 * 6 / 12
= $5,700
option (b) $5,700 is the correct choice
option (b) $5,700 is the correct choice
balaji rao answered 3 years agoRelated Solutions
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