Question

Barlow purchased a used van for use ih its business on January 1, 2017. It paid $11.000 for the van. Barlow expects the van to have a useful life of four years, with an estimated residual value of $800. Barlow expects to drive the van 31,000 miles during 2017, 18,000 miles during 2018, 14,000 miles in 2019, and 18,600 miles in 2020, for total expected miles of 81.600. Read the requirements (Complete all answer boxes. Enter a "0" for any zero values.) > Straight-line method Annual Accumulated Depreciation Expense Year Depreciation Book Value Start 2017 2018 2019 ules 2020 Is of 16 Enter any number in the edit fields and then continue to the next question.

Answer 1

Straight line depreciation expense = (Cost - Residual value) / Years

= ($11,000 - $800) / 4

= $2,550

Year	Annual depreciation expense	Accumulated depreciation expense	Book Value
Start			$11,000
2017	$2,550	$2,550	$8,450
2018	$2,550	$5,100	$5,900
2019	$2,550	$7,650	$3,350
2020	$2,550	$10,200	$800

Working notes :

Book value = Cost - Accumulated depreciation expense

2017 = $11,000 - $2,550

= $8,450

2018 = $11,000 - $5,100

= $5,900

2019 = $11,000 - $7,650

= $3,350

2020 = $11,000 - $10,200

= $800