Mays Corporation purchased a new truck on January 1, Year 1 for $65,000 cash. Mays estimated salvage value of $10,000 at the end of the useful life of 5 years. On January 1, Year 3, Mays had to replace the engine of the truck paying $4,000 cash. Due to the replaced engine, Mays estimates that the truck will continue a productive life for another four years.
Required:
Assuming straight-line depreciation is used, calculate the depreciation expense for Year 3.

Question

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The Answer of Mays Corporation purchased a new truck on January 1, Year 1 for $65,000 cash. Mays estimated salvage value of $10,000 at the end of the useful life of 5 years. On January 1, Year 3, Mays had to replace the engine of the truck paying $4,000 cash. Due to the replaced engine, Mays estimates that the truck will continue a productive life for another four years.
Required:
Assuming straight-line depreciation is used, calculate the depreciation expense for Year 3.

Mays Corporation Purchased a New Truck on January 1, Year