Daytona Beach Company purchased a car for a salesman for $23,500 at the beginning of 2017.The car had an estimated life of five years,and an estimated residual value of $3,500.Daytona Beach used the straight-line depreciation method.At the beginning of 2018,Daytona Beach incurred $2,500 to replace the car's transmission.This resulted in a two-year extension of the car's useful life,but no change in the residual value.
A. What type of cost is the $\$ 2,500$ ? Explain.

B. Calculate the book value of the car at the end of 2017 .

C. Find the depreciation expense on the car for 2018 .

Question

Daytona Beach Company purchased a car for a salesman for $23,500 at the beginning of 2017.The car had an estimated life of five years,and an estimated residual value of $3,500.Daytona Beach used the straight-line depreciation method.At the beginning of 2018,Daytona Beach incurred $2,500 to replace the car's transmission.This resulted in a two-year extension of the car's useful life,but no change in the residual value.
 A. What type of cost is the $\$ 2,500$ ? Explain.

B. Calculate the book value of the car at the end of 2017 .

C. Find the depreciation expense on the car for 2018 .

Quizplus · Accepted Answer

The Answer of Daytona Beach Company purchased a car for a salesman for $23,500 at the beginning of 2017.The car had an estimated life of five years,and an estimated residual value of $3,500.Daytona Beach used the straight-line depreciation method.At the beginning of 2018,Daytona Beach incurred $2,500 to replace the car's transmission.This resulted in a two-year extension of the car's useful life,but no change in the residual value.
 A. What type of cost is the $\$ 2,500$ ? Explain.

B. Calculate the book value of the car at the end of 2017 .

C. Find the depreciation expense on the car for 2018 .

Daytona Beach Company Purchased a Car for a Salesman for $23,500