Question

Question 9

1 pts
a
D
ESPE
The cost of a van is $16,000 with a residual value of
$2,000. The van has an estimated useful life of 5 years.
The mount of depreciation expense using straight-line
each year is:
D
O $933
O $373
O $737
O none of the above​

Answer 1

none of the above​

Step-by-step explanation:

depreciation expense per year using straight line method = (purchase cost - residual value) / useful life = ($16,000 - $2,000) / 5 years = $14,000 / 5 = $2,800 per year

The straight line method for calculating depreciation expense is the simplest method that we can use, since the depreciation expense is the same for every year. Unlike double balance, sum of digits or any other kind of deprecation expense method which varies from year to year.

Answer 2

The correct answer is:

None of the above (d)

Step-by-step explanation:

Depreciation is the reduction in the fair value of an asset over time.

cost of van = $16,000

residual value = $2,000

useful life = 5 years

depreciation using straight-line allocation is allocating the depreciation cost equally over the useful life of the asset.

`Annual\ depreciation\ expenses\ = ((cost\ of\ asset\ -\ salvage\ value)/(useful\ life\ of\ asset) \\\\\\Annual\ depreciation\ expenses\ = (16,000 - 2,000)/(5) \\= (14,000)/(5) \\Annual\ depreciation\ expenses\ = \$2,800`