Robert purchased a truck for $35,000 with a residual value of $10,000 and a life expectancy of 5 years; using straight-line depreciation,the amount of the depreciation adjustment for the first year would be:
A)$5,000.
B)$6,000.
C)$6,400.
D)$4,000.

Question

Quizplus · Accepted Answer

The straight-line depreciation formula is (Cost - Residual Value) / Useful Life. For Robert's truck, this is ($35,000 - $10,000) / 5 = $25,000 / 5 = $5,000 per year.

Robert Purchased a Truck for $35,000 with a Residual Value