Question

Straight-Line Depreciation A small delivery truck was purchased on January 1 at a cost of $21,920. It has an estimated useful life of four years and an estimated salvage value of $4,680. Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the straight-line method.

Answer 1

Answer:

Rate of depreciation per year  is 4310 $/ year and the depreciation schedule is given below.

Step-by-step explanation:

According to the question,

since, it is straight-line depreciation,

rate of depreciation per year = $\frac{21920 - 4680}{4}$   $/year

                                                = 4310 $/ year

So we can prepare the following table.  (year = 0 for the base period)

Year    Depreciation   Accumulated      Book value

              expense        depreciation  

                 ( in $)               (in $)                    (in $)

 0              0                         0                      21920

 1            4310                    4310                    17610

 2           4310                     8620                  13300

 3           4310                      12930                  8990

 4           4310                      17240                  4680