The Western Salvage Service bought three trucks. The following table shows the cost, estimated life, and...
The Western Salvage Service bought three trucks. The following table shows the cost, estimated life, and resale estimate for each truck. Compute the amount of depreciation for each vehicle for the first 2 years using the straight-line method. Round your intermediate calculations and final answers to the nearest dollar.
| Original Cost | Estimated Life | Resale Estimate | Depreciation for First Two Years |
| a. $31,000 | 6 yr | $4,000 | $ |
| b. $43,000 | 8 yr | 2,000 | $ |
| c. $60,000 | 7 yr | 11,000 | $ |
Homework Answers
Depreciation under SLM method:
Depreciation expense = (C-S) / L
C = Cost of the asset
S = Salvage value
L = Life of the asset
| Originial cost © | Estimated life (L) | Resale estimate (S) | Depreciation per year D = (C-S)/L | Calculation | Depreciation for two years (D*2) |
| 31000 | 6 | 4000 | 4500 | (31000-4000)/6 | 9000 |
| 43000 | 8 | 2000 | 5125 | (43000-2000)/8 | 10250 |
| 60000 | 7 | 11000 | 7000 | (60000-11000)/7 | 14000 |
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