Skysong Ltd. purchased a new delivery truck on January 1, 2023. The truck cost $104,600 and was estimated to have a residual value of $1,000. It was estimated that the truck would be driven 518,000 kilometres for the company over its useful life of five years. During 2023, the truck was driven 95,100 kilometres, and 128,800 kilometres in 2024. Calculate depreciation expense for 2023 and 2024. (Round depreciation expense per kilometre to 2 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 5,275.) Depreciation expense $ 2023 19,020 2024
Skysong Ltd. purchased a new delivery truck on January 1, 2023. The truck cost $104,600 and was estimated to have a residual value of $1,000. It was estimated that the truck would be driven 518,000 kilometres for the company over its useful life of five years. During 2023, the truck was driven 95,100 kilometres, and 128,800 kilometres in 2024. Calculate depreciation expense for 2023 and 2024. (Round depreciation expense per kilometre to 2 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 5,275.) Depreciation expense $ 2023 19,020 2024
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4EB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...
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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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