Answer:
Depreciation expense for the year ended December 31, 2022: $15,000
Explanation:
Best Construction uses straight-line depreciation method. Depreciation Expense each year is calculated by following formula:
Annual Depreciation Expense = (Cost of asset − Residual Value)/Useful Life
The delivery truck was purchased on June 1, 2021 and had cost of $90,000, Estimated service life of 5 years and Estimated residual value of $15,000.
Annual Depreciation Expense = ($90,000 - $15,000)/5 = $15,000
Depreciation expense for the year ended December 31, 2022 = $15,000
