A company purchased a delivery van for $28,000 with a salvage value of $2,000 on September...
A company purchased a delivery van for $28,000 with a salvage value of $2,000 on September 1, 2014. It has an estimated useful life of 6 years. Using the straight-line method and whole dollar amounts, how much depreciation expense should the company recognize on December 31, 2014? (rounded)
Homework Answers
Cost of Van = $28,000
Salvage Value = $2,000
Useful Life = 6 years
Annual Depreciation = (Cost of Van - Salvage Value) / Useful
Life
Annual Depreciation = ($28,000 - $2,000) / 6
Annual Depreciation = $26,000 / 6
Annual Depreciation = $4,333.33
Depreciation Expense for 2014 = Annual Depreciation * (4 /
12)
Depreciation Expense for 2014 = $4,333.33 * (4 / 12)
Depreciation Expense for 2014 = $1,444.44
So, the company should recognize depreciation expense of $1,444.44 on December 31, 2014.
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