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Cullumber Chemicals Company acquires a delivery truck at a cost of $20,400 on January 1, 2022. The truck is expected to have a salvage value of $4,500 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.

Respuesta :

Answer: $3975

Step-by-step explanation:

Depreciation means when the value of an asset reduces because the asset has been in use.

Cost of delivery truck = $20,400

Less: Salvage value = $(4,500)

Depreciable value = $15,900

Since the life of the truck is 4 Years, then the depreciation per year will be:

= ($15,900/4)

= $3,975

Therefore, the annual depreciation using straight line method for the first year and second year is $3,975 each

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