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What formula can I use for this question. Rose Bush Nursery purchased a delivery truck for...

What formula can I use for this question.

Rose Bush Nursery purchased a delivery truck for $34,400. The truck is expected to have a useful life of 5 years and a residual value of $1,400. If the truck was purchased on June 1, 2019, what is the amount of depreciation expense for the truck for the year ended December 31, 2019? The company uses the straight-line method of depreciation.

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Answer #1

Answer:- $3,850

Explanation

Depreciation expense: straight - line depreciation method = Depreciable amount / useful life
Depreciable amount = cost - Salvage value
Depreciable amount = $34,400 - $1,400 = $33,000
Useful life =5 years
Depreciation expense: Straight - line depreciation amount = 33,000/5 =$6,600 per year
As asset is purchased on June 1 ,2019 so depreciation will be charge for 7 months for December 2019
Depreciation expense for December 2019 = $6,600 × 7/12 = $3,850
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