A company purchased a delivery van for $28,000 with a salvage value of $3,000 on September 1,Year 1.It has an estimated useful life of 5 years.Using the straight-line method,how much depreciation expense should the company recognize on December 31,Year 1?
A)$5,000.
B)$1,667.
C)$1,400.
D)$1,250.
E)$2,067.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost - Salvage value) / Useful life= (28,000 - 3,000) / 5= 25,000 / 5= $5,000 per yearDepreciation expense for 4 months (September 1 to December 31)= 5,000 * 4/12= $1,667

A Company Purchased a Delivery Van for $28,000 with a Salvage