Maximus Dog Company purchased a new supply van on January 1, 2011, for $35,000. The van is estimated to last for five years and will then be sold, at which time it should be worth approximately $5,000. The company uses straight-line depreciation and has a fiscal year end of December 31.
1. How much depreciation expense will be shown on the income statement for the year ended December 31, 2011?
2. What is the book value (also called carrying value) of the van on the balance sheet for each of the five years beginning with December 31, 2011?