A light truck is purchased on January 1 at a cost of $35,000. It is expected to

Question:

A light truck is purchased on January 1 at a cost of $35,000. It is expected to serve for eight years and have a salvage value of $5,000. Calculate the depreciation expense for the first and third years of the truck's life using the following methods:

1. Straight-line

2. Double-declining-balance (round to two decimal places)

3. Sum-of-the-years'-digits (round to two decimal places)

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...