Question

Bob purchased a truck for $53,000 with a residual value of $26,000 and a life expectancy of 5 years; using straight-line depreciation, the amount of the depreciation adjustment for the first year would be:

Answer 1

Answer:

the depreciation adjustment for the first year is $5,400

Explanation:

The computation of the amount of depreciation adjustment for the first year is shown below:

= (Purchase cost - residual value) ÷ (expected life)

= ($53,000 - $26,000) ÷ ( 5 years)

= ($27,000) ÷ ( 5 years)

= $5,400

Hence, the depreciation adjustment for the first year is $5,400

We simply applied the above formula so that the correct value could come

And, the same is to be considered