A company purchased a truck for $50,000 on July 1, 2009. The truck has an estimated useful life of 5 years and will have no salvage value. It is estimated that the truck can be driven for 150,000 miles. The truck was driven for 18,000 miles during 2009. If the goal is to reduce taxable income to the lowest amount, which method should be elected and how much depreciation can be deducted in 2009?

Question

Quizplus · Accepted Answer

The double declining-balance method provides the highest depreciation expense in the first year of an asset's life, thus reducing taxable income more than the other methods listed.

A Company Purchased a Truck for $50,000 on July 1