Question

1. [4 points] The SoShal DistanSing Company purchased a new food delivery truck on April 1st of this year. The truck cost $35,000 to purchase and another 26,000 to add food safe racking and refrigeration units. The truck has a useful life of 9 years. SoShal estimates that the salvage value of the truck to be $8750 at the end of its useful life. a. [1 point] Calculate the depreciation schedule (i.e. depreciation

Answer 1

Answer:

Depreciation each year is $5,805.56 and Schedule for the depreciation attached with this answer please find it.

Explanation:

Depreciation is a expense which is charged against an asset over its useful life due to wear and tear of that asset. This expense is recorded as and Expense in Income statement and accumulated in an contra asset account asset account until the disposal of the asset.

Total Cost = Truck Purchase price and Additions = $35,000 + $26,000 = $61,000

Salvage value = $8,750

Useful life = 9 years

Depreciation = ($61,000 - $8,750) / 9 = $5805.56

We will use the straight line depreciation method.

Straight line method depreciates the asset on its useful life after deducting salvage value from the cost of the asset.