Required information Exercise 11-1 (Static) Depreciation methods [LO11-2] [The following information applies to the questions displayed below.] On January 1, 2024, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles. Required: Calculate annual depreciation for the five-year life of the van using each of the following methods. Exercise 11-1 (Static) Part 1 1. Straight line. Straight-line per year
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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![Required information
Exercise 11-1 (Static) Depreciation methods [LO11-2]
[The following information applies to the questions displayed below.]
On January 1, 2024, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its
five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the
company expects to drive the van 100,000 miles.
Required:
Calculate annual depreciation for the five-year life of the van using each of the following methods.
Exercise 11-1 (Static) Part 1
1. Straight line.
Straight-line
per year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9288abc4-6622-41d0-ba5f-98e8e8d58b64%2F8aa50f19-6012-4210-815e-0821ce30ab19%2F24zvib_processed.png&w=3840&q=75)
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