Sammie J’s pizza shop purchased a new delivery vehicle on January 1, 2015. The vehicle cost $16,850, has a salvage value of $2,270 and a useful life of 6 years. Calculate depreciation for years 1-6. On January 1st, 2018 Sammie J’s Pizza repaired the engine in the delivery truck for a cost of $3,800 for the vehicle that was originally purchased on January 1, 2015. This is a capital expenditure. Revise the depreciation for the delivery truck with the revised cost and new useful life of 8 years. I am using straight-line depreciation, please show me how the answer is calculated. Thank you so much
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.
Sammie J’s pizza shop purchased a new delivery vehicle on January 1, 2015. The vehicle cost $16,850, has a salvage value of $2,270 and a useful life of 6 years. Calculate
On January 1st, 2018 Sammie J’s Pizza repaired the engine in the delivery truck for a cost of $3,800 for the vehicle that was originally purchased on January 1, 2015. This is a capital expenditure. Revise the depreciation for the delivery truck with the revised cost and new useful life of 8 years.
I am using straight-line depreciation, please show me how the answer is calculated. Thank you so much
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