Gardner Corporation purchased a truck at the beginning of 2014 for $90,000. The truck is estimated to have a salvage value of $3,600 and a useful life of 120,000 miles. It was driven 18,000 miles in 2014 and 32,000 miles in 2015. What is the depreciation expense for 2014?

Gardner Corporation purchased a truck at the beginning of 2014 for $90,000. The truck is estimated to have a salvage value of $3,600 and a useful life of 120,000 miles. It was driven 18,000 miles in 2014 and 32,000 miles in 2015. What is the depreciation expense for 2014?

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Description: Gardner Corporation purchased a truck at the beginning of 2014 for $90,000. The truck is estimated to have a salvage value of$3,600 and a useful life of 120,000 miles. It was driven 18,000 miles in 2014 and 32,000 miles in 2015. What is thedepreciat

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Gardner Corporation purchased a truck at the beginning of 2014 for $90,000. The truck is estimated to have a salvage value of
$3,600 and a useful life of 120,000 miles. It was driven 18,000 miles in 2014 and 32,000 miles in 2015. What is the
depreciation expense for 2014?

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