Question

Best Construction purchased a delivery truck on June 1, 2021. The following information is available: Cost = $90,000 Estimated service life = 5 years Estimated residual value = $15,000 Calculate depreciation expense for the year ended December 31, 2021, using straight-line depreciation.

Answer 1

Answer:

$15,000

Explanation:

Annual depreciation = (cost price - residual value)/Service life

Where  Cost = $90,000

Estimated service life = 5 years

Estimated residual value = $15,000

Annual Depreciation = (90,000 - 15,000) / 5

=75000 / 5

= $15,000

Depreciation expense for the year ended December 31, 2021 = $15,000