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Blossom Chemicals Company acquires a delivery truck at a cost of $31,200 on January 1, 2022. The truck is expected to have a salvage value of $4,200 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:

$6,750

Explanation:

The computation of the annual depreciation using the straight line method for the first and second year is shown below:

= (Original cost - residual value) ÷ (useful life)

= ($31,200 - $4,200) ÷ (4 years)

= ($27,000) ÷ (4 years)  

= $6,750

In this method, the depreciation is the same for all the remaining useful life

So in the given case, the first year and the second year depreciation is $6,750 respectively and the same is to be charged every year

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