Montezuma Inc. purchases a delivery truck for $17,600. The truck has a salvage value of $4,000 and is expected to be driven for 8 years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $6,000. A. Determine the Depreciation Expense for the final three years of the asset’s life. Round final answer to nearest whole dollar. $ per year Feedback When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount. B. Prepare the journal entry for year four. If an amount box does not require an entry, leave it blank. Round final answer to nearest whole dollar. Depreciation Expense Accumulated Depreciation-Delivery Truck
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.
Montezuma Inc. purchases a delivery truck for $17,600. The truck has a salvage value of $4,000 and is expected to be driven for 8 years. Montezuma uses the
A. Determine the Depreciation Expense for the final three years of the asset’s life. Round final answer to nearest whole dollar.
$ per year
When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount.
B. Prepare the
| Depreciation Expense | |||
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