BACK EXT Brief Exercise 9-4 Gordon Chemicals Company acquires a delivery truck a

Question

BACK EXT Brief Exercise 9-4 Gordon Chemicals Company acquires a delivery truck at a cost of $30,200 on January 1, 2017. The truck is expected to have a salvage value of $2,800 at the end of its s year useful life. Compute annual depreciation for the first and second years using the straight-line method. (Round answers to O decimal places, e.g. 125.) First Year Second Year Annual depreciation under straight-line method s INTERACTIVE TUTORIAL By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Question Attempts: 0 of 3 used SAVE FOR LATERSURKIT ANSWER 5 7 8 9 0 3

Explanation / Answer

Annual depreciation ( Straight line method ) = [ Cost of the asset - Salvage value ] / Useful life of a the asset

Given,

   Cost of the asset ( truck ) = $30200

   salvage value = $ 2800

Useful life of the asset = 5 years

Annual depreciation = [ $30200 - $ 2800 ] / 5 = 5480

1st year - $5480

2nd year - $5480

Under Straight line method , depreciation is the same in each year , Depreciation is $ 5480 for both 1st and 2nd year.

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