Asked Nov 9, 2019
M8-12 Computing Depreciation Under Straight-Line and Double-Declining-Balance
A delivery van costing $18,000 is expected to have a $1,500 salvage value at the end of its useful life of 5
years. Assume that the truck was purchased on January 1, 2016. Compute the depreciation expense for
2017 (its second year) under each of the following depreciation methods:
a. Straight-line
b. Double-declining-balance

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Compute the depreciation expense for the year 2017 (second year) Straight line method: Cost of the delivery van (a) Estimated life of the delivery van (b) Estimated salvage value (c) (a) $18,000 5Year $1,500 Depreciation expense (d) = [(a) - (c)] / (b) $3,300 Per year Rate of depreciation (e) = (d) / [(a) - (c) 20% Therefore, depreciation expense under straight line method for 2017 is $3,300


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