The Pike Company purchased a delivery truck for$71,000and estimated that the truck would have a useful life of 6 years at which time it could be sold for$6,200. If the truck was purchased on March 1, 2021, how much depreciation expense in total would be recorded in 2021? As needed, round your final answer to the nearest whole dollar.
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.
The Pike Company purchased a delivery truck for$71,000and estimated that the truck would have a useful life of 6 years at which time it could be sold for$6,200. If the truck was purchased on March 1, 2021, how much
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