Iverycoast Ltd purchased a van on 1 January 2016 for $840,000.Estimated life of the van was five years,and its estimated residual value was $91,000.Iverycoast uses the straight-line method of depreciation.At the beginning of 2018,the company revised the total estimated life of the asset from five years to six years.The estimated residual value remained the same as estimated earlier.Calculate the depreciation expense for the year 2018.

Question

Quizplus · Accepted Answer

Depreciation expense for 2018 = (Cost of van - Residual value) / Revised estimated life= (840,000 - 91,000) / 6= $124,833.33Depreciation expense for 2018 = $124,833.33

Iverycoast Ltd Purchased a Van on 1 January 2016 for $840,000.Estimated