Q:

# Jiang purchased a moving truck for the business. He paid $40,000 for the truck. Its salvage value is$8,500. Select the correct answer from the drop-down menu.The depreciation expense of the moving truck for a useful life of 10 years is (blank space). If the truck’s useful life where 15 years, the depreciation expense would come to(blank space).

Accepted Solution

A:
Answer:A. $3,150B.$2,100Step-by-step explanation:A. Given, Trucks cost price = $40,000Salvage Value =$8,500Useful life = 10 yearsSince there is no requirement, I am using straight-line depreciation method to calculate the depreciation expense. We Know, Depreciation Expenses = (Cost price - Salvage Value) / Useful LifeTherefore, Depreciation expense = ($40,000 -$8,500)/10Depreciation Expense = $31,500/10Depreciation Expense =$3,150Therefore, under the straight-line method, the depreciation expense will be = $3,150.B. Given, (When the useful year is 15)Trucks cost price =$40,000Salvage Value = $8,500Useful life = 15 yearsSince there is no requirement, I am using straight-line depreciation method to calculate the depreciation expense. We Know, Depreciation Expenses = (Cost price - Salvage Value) / Useful LifeTherefore, Depreciation expense = ($40,000 - $8,500)/15Depreciation Expense =$31,500/15Depreciation Expense = $2,100Therefore, under the straight-line method, the depreciation expense will be =$2,100