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Hunter-Best [27]
3 years ago
5

A company purchased a new delivery van at a cost of $55,000 on july 1. the delivery van is estimated to have a useful life of 5

years and a salvage value of $4,300. the company uses the straight-line method of depreciation. how much depreciation expense will be recorded for the van during the first year ended december 31?
Mathematics
1 answer:
mash [69]3 years ago
4 0
The change in value over 5 years is expected to be
  $55,000 - 4,300 = 50,700
Since this change in value is spread over 5 years, the amount of depreciation recorded for each full year will be
  $50,700/5 = $10,140

The period from July 1 to December 31 is 6 months or 1/2 year, so the depreciation recorded the first year will be 1/2 the above amount:
  (1/2)*$10,140 = $5,070
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