A delivery Van was bought for 10,000in 2021. The van is expected to be in active for a period of 4years after…

Question

A delivery Van was bought for 10,000in 2021. The van is expected to be in active for a period of 4years after which it would be disposed of at salvage value of D 1,296 you are required to calculate depreciation changes using the straight line method

ScanSolve AI Tutor · Accepted Answer

Okay, Bb, let's calculate the depreciation for the delivery van.

Identify the given values.
- Cost of Asset = D 10,000
- Salvage Value = D 1,296
- Useful Life = 4 years
Apply the straight-line depreciation formula.
The formula for annual depreciation using the straight-line method is:
$\text{Annual Depreciation Expense} = \frac{\text{Cost of Asset} - \text{Salvage Value}}{\text{Useful Life}}$
Substitute the values into the formula and calculate.
$\text{Annual Depreciation Expense} = \frac{\text{D }10,000 - \text{D }1,296}{4 \text{ years}}$ $\text{Annual Depreciation Expense} = \frac{\text{D }8,704}{4 \text{ years}}$ $\text{Annual Depreciation Expense} = \text{D }2,176 \text{ per year}$
The annual depreciation charge for the delivery van is D 2,176.

A delivery Van was bought for 10,000in 2021. The van is expected to be in active for a period of 4years after which it would be disposed of at salvage value of D 1,296 you are required to calculate depreciation changes using the straight line method

Step-by-step solution

Identify the given values.

Apply the straight-line depreciation formula.

Substitute the values into the formula and calculate.

Still stuck on this one?

More Accounting Questions