Question:
On January 1, year 1, Marino moving company paid $48,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of depreciation expense recognized on the year 2 income statement is
Answer:
Annual depreciation expense = (Cost of the asset – Salvage value) ÷ Useful life Depreciation expense per year = ($48,000 – $8,000) ÷ 4
= $10,000
The amount of depreciation expense recognized on the year 2 income statement is $10,000
Related Questions:
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- On January 1, year 1, Marino moving company paid $48,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of book value shown on the year 2 balance sheet is