On September 1,Emil Rovey purchased a vehicle for $57,500 with a residual value of $7,500.The estimated useful life is 5 years and the company uses the straight-line method.What is the depreciation expense for the year ended December 31?

Question

Quizplus · Accepted Answer

Partial-year depreciation = (Cost − Residual value)× (1 ÷ Useful life)× Time period in use
= ($57,500 − $7,500)× (1 ÷ 5)× 4 months (September 1 - through December 31)÷ 12 months = $3,333

On September 1,Emil Rovey Purchased a Vehicle for $57,500 with a Residual