Question

Bonita Industries purchased a truck at the beginning of 2020 for $110000. The truck is estimated to have a salvage value of $3900 and a useful life of 119000 miles. It was driven 24000 miles in 2020 and 32000 miles in 2021. What is the depreciation expense for 2020?

Answer 1

Answer:

The depreciation expense for 2020 is $21398.32.

Explanation:

Given information:

Cost of truck = $110000

Salvage value = $3900

Useful life = 119000 miles

Miles driven in 2020 = 24000

Miles driven in 2021 = 32000

We need to find the depreciation expense for 2020

The formula for depreciation expense is

$\text{Depreciation expense}=\dfrac{\text{Cost of truck - Salvage value}}{\text{Useful life of in miles}}\times \text{Miles driven in 2020}$

$\text{Depreciation expense}=\dfrac{110000-3900}{119000}\times 24000$

$\text{Depreciation expense}=21398.3193277$

$\text{Depreciation expense}\approx \ 21398.32$

Therefore, the depreciation expense for 2020 is $21398.32.