On September 1, a company purchased a vehicle for $93,000 with a residual value

Question

On September 1, a company purchased a vehicle for $93,000 with a residual value of $7,000. The estimated useful life is 8 years and the company uses the straight-line method. What is the depreciation expense for the year ended December 31?

$2,688

$10,750

$3,875

$3,583

On September 1, a company purchased a vehicle for $93,000 with a residual value of $7,000. The estimated useful life is 8 years and the company uses the straight-line method. What is the depreciation expense for the year ended December 31?

Explanation / Answer

Depreciation expense per year=(Cost-Residual value)/USeful life

=(93000-7000)/8=$10750

Hence depreciation expense for the year ended December 31=($10750*4/12)

=$3583(Approx)(D)

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