Talarico's Subs purchased a new van for $25,000,its estimated useful life at 100,000 miles,residual value of $5,000.The van was driven 15,000 miles in year 1.What is the depreciation expense in year 1?

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Quizplus · Accepted Answer

The depreciation expense is calculated using the straight-line method: (Cost - Residual Value) / Useful Life. Here, it's ($25,000 - $5,000) / 100,000 miles = $0.20 per mile. For 15,000 miles, the depreciation is 15,000 miles * $0.20/mile = $3,000.

Talarico's Subs Purchased a New Van for $25,000,its Estimated Useful