Finx, Inc., purchased a truck for $35,000. The truck is expectedto be driven 15,000 miles...

Finx, Inc., purchased a truck for $35,000. The truck is expected to be driven 15,000 miles per year over a five-year period and then sold for approximately $5,000. Determine depreciation for the first year of the truck’s useful life by the straight-line.

Expert Solution

Cost of truck = $35,000

Useful life = 5 years

Residual value = $5,000

Annual depreciation expense = (Cost of truck - Residual value)/Useful life

= (35,000-5,000)/5

= $6,000

Depreciation expense for year 1 = $6,000

ekkarill92 answered 2 years ago

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