Mays Corporation purchased a new truck on January 1, Year 1 for $65,000 cash. The salvage value was estimated to be $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. At that time, Mays estimates that the truck will continue a productive life for another four years. The company uses the straight-line method.
Required:
a)Calculate the depreciation expense for Year 3.

Question

Quizplus · Accepted Answer

The Answer of Mays Corporation purchased a new truck on January 1, Year 1 for $65,000 cash. The salvage value was estimated to be $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. At that time, Mays estimates that the truck will continue a productive life for another four years. The company uses the straight-line method.
Required:
a)Calculate the depreciation expense for Year 3.

Mays Corporation Purchased a New Truck on January 1, Year