Ex; 1 The Oberon Company purchased a delivery truck for $95,000 on January 2. Th

Question

Ex; 1 The Oberon Company purchased a delivery truck for $95,000 on January 2. The truck was estimated to have a $3,000 salvage value and a 4 year life. The truck was depreciated using the straight-line method. At the beginning of the third year, it was obvious that the truck's total useful life would be 6 years rather than 4, and the salvage at the end of the 6th year would be $1,500. Determine the depreciation expense for the truck for the 6 years of its life. Show computations. Y ear Depreciation expense

Explanation / Answer

Calculate depreciation expenses :

Year Depreciation expenses 1 (95000-3000/4) 23000 2 (95000-3000/4) 23000 3 (95000-46000-1500)/4 11875 4 (95000-46000-1500)/4 11875 5 (95000-46000-1500)/4 11875 6 (95000-46000-1500)/4 11875

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