El Dorado Machinery Company purchased a delivery truck at a cost of $32,000 on February 8, 2012.

Question:

El Dorado Machinery Company purchased a delivery truck at a cost of $32,000 on February 8, 2012. The truck has a useful life of six years with an estimated salvage value of $5,000. Compute the annual depreciation for the first two years using
(a) The straight‐line method.
(b) The 150% declining‐balance method.

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...

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