Gulfcoast Company purchased a van on January 1,2019,for $930,000.Estimated life of the van was five years,and its estimated residual value was $95,000.Gulfcoast uses the straight-line method of depreciation.Calculate the book value of the van at the end of 2019.

Question

Quizplus · Accepted Answer

Depreciation per year = (Cost - Residual value) / Useful life
Depreciation per year = ($930,000 - $95,000) / 5 = $167,000
Book value at the end of first year = $930,000 - $167,000 = $763,000

Gulfcoast Company Purchased a Van on January 1,2019,for $930,000