A new vehicle was purchased on January 1 for $38,000.It has a salvage value of $7,000 and a useful life of 5 years.To the nearest dollar,how much will the depreciation expense for the vehicle be for the first year using the straight-line method?
A)$6,200
B)$633
C)$7,600
D)$517

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates annual depreciation by subtracting the salvage value from the purchase price and dividing by the useful life. ($38,000 - $7,000) / 5 = $6,200.

A New Vehicle Was Purchased on January 1 for $38,000