A company purchased a new delivery van at a cost of $60,000 on July 1. The...

A company purchased a new delivery van at a cost of $60,000 on July 1. The delivery van is estimated to have a useful life of 6 years and a salvage value of $4800. 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. $5,000

b. $6,480

c. $4,600

d. $9,200

e. $5,600

Expert Solution

Depreciation expense under Straight line method = (Cost - Salvage value) / Estimated useful life

= ($60,000 - $4,800) / 6

= $9,200

Depreciation for first year = $9,200 * 6 / 12

= $4,600

The answer is Option c.

ekkarill92 answered 2 years ago

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