A truck with a cost of $82,000 has an estimated residual value of $16,000, has an estimated useful life of 12 years, and is depreciated by the straight-line method.

a. determine the amount of the annual depreciation. $

b. determine the book value at the end of the seventh year of use. $

c. assuming that at the start of the eighth year the remaining life is estimated to be six years and the residual value is estimated to be $12,000, determine the depreciation expense for each of the remaining six years. $

Question

Mathematics

Lee Glass

29 December, 14:01

A truck with a cost of $82,000 has an estimated residual value of $16,000, has an estimated useful life of 12 years, and is depreciated by the straight-line method.

a. determine the amount of the annual depreciation. $

b. determine the book value at the end of the seventh year of use. $

c. assuming that at the start of the eighth year the remaining life is estimated to be six years and the residual value is estimated to be $12,000, determine the depreciation expense for each of the remaining six years. $

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Answers (1)

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Kingston Kim · Answer 1

1. Depreciation = (cost of asset - salvage value) / life of asset Depreciation = (82,000 - 16,000) / 12 = $5,500 per year

2. The book value at the end of the seventh year of use is

82,000-5,500*7years=43,500

3. Depreciation = (cost of asset - salvage value) / life of asset

Depreciation = (43,500-12,000) : 6

=5,250 per year