A company purchased a delivery van for $28,000 with a salvage value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

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Quizplus · Accepted Answer

Depreciation expense = (Cost - Salvage value) / Useful life= (28,000 - 3,000) / 5= 25,000 / 5= $5,000 per yearDepreciation expense for 4 months (September 1 to December 31)= 5,000 * 4/12= $1,667

A Company Purchased a Delivery Van for $28,000 with a Salvage