Question

Corales Company acquires a delivery truck at a cost of $58,000. The truck is expected to have a salvage value of $11,000 at the end of its 4-year useful life. Compute annual depreciation expense for the first and second years using the straight-line method. Year 1 Year 2 Annual depreciation expense $ 11750 $ 23500

Answer 1

Answer:

Accumulated depreciation:

Year 1= 11,750

Year 2= 23,500

Explanation:

Giving the following information:

he truck is expected to have a salvage value of $11,000 at the end of its 4-year useful life.  The purchase price is $58,000.

Depreciation method: straight-line.

Depreciation= (purchase price - salvage value)/ useful life

Depreciation= (58,000 - 11,000)/4= $11,750

Annual depreciation:

Year 1: $11,750

Year 2: $11,750

Accumulated depreciation:

Year 1= 11,750

Year 2= 23,500