A company purchased a delivery van for $18,200 with a salvage value of $2,200 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1
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Ответ:
$1,066.67
Explanation:
Using straight line method, depreciation expense is constant throughout the life of an asset.
Depreciation is calculated as seen below;
Depreciation = Cost of asset - Residual value
= $18,200 - $2,200
= $16,000
Depreciation rate = 1/5 × 100
= 20 percent
Depreciation per year = 20/100 × 16,000
= $3,200
During the year 1, the van operated for four months (Sept, Oct, Nov and Dec)
Depreciation for the four months = 4/12 × 3,200
= $1,066
Ответ:
I believe it is growth, decay would be the other way around.