Question

A truck costs $9,000 with a residual value of $1,000. the truck is expected to have a useful life of 40,000 miles. By assuming the truck is driven 10,000 miles the first year, the depreciation expense would be:

Answer 1

Answer:

$2,000

Explanation:

Cost of truck =  $9,000

Residual value =  $1,000

Value to be depreciated =  $9,000 -  $1,000

                                        =  $8,000

if the truck has a useful life of 40,000 miles and 10,000 miles is covered in the first year,

Depreciation expense for the first year = (10000/40000) ×  $8,000

                                                 =  $2,000