On July 1, 2020, Nuby Trucking Company purchased a new truck for $52,000. The truck is estimated to have a useful life of six years and a residual value of $10,000. How much depreciation expense will be recorded for the truck during the year ended December 31, 2020?

Question

Quizplus · Accepted Answer

The depreciation expense for the year can be calculated using the straight-line method: (Cost - Residual Value) / Useful Life. This equals ($52,000 - $10,000) / 6 = $7,000 per year. Since the truck was purchased on July 1, only 6 months of depreciation applies for 2020, so $7,000 / 2 = $3,500.

On July 1, 2020, Nuby Trucking Company Purchased a New