Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and
Question:
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Step by Step Answer:
Depreciable value Cost Salvage value 25000 6000 19000 Depreciation expe...View the full answer
Principles Of Accounting Volume 1 Financial Accounting
ISBN: 9781593995942
1st Edition
Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper, OpenStax
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
Students also viewed these Business questions
-
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of production depreciation...
-
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation...
-
Concentric shells r = 20 cm and r = 30 cm are held at V = 0 and V = 50, respectively. If the space between them is filled with dielectric material ( = 3.10, a = 1012 S/m), find: (a) V, E, and D, (b)...
-
Martha's current marginal utility from consuming orange juice is 75 utils per ounce and her marginal utility from consuming coffee is 50 utils per ounce. If orange juice costs 25 cents per ounce and...
-
The optimum shape of a riser is spherical to ensure that it cools more slowly than the casting it feeds. Spherically shaped risers, however, are difficult to cast. (1) Sketch the shape of a blind...
-
Does object-oriented technology help or hinder testing?
-
Kohler Company has the following information for June: Sales .....................$ 540,000 Variable cost of goods sold ............. 194,400 Fixed manufacturing costs .............. 129,600 Variable...
-
A $1,000 par value bond that pays interest annually just paid $74 in interest. What is the coupon rate? Q2) A 05.00% coupon, 22-year annual bond is priced at $925. What is the current yield for this...
-
The U.S. Department of Agriculture publishes statistics on the production of various types of food commodities by month. Shown here are the production figures on broccoli for January of a recent year...
-
Speedy Delivery has a very lazy accountant. When originally setting up the delivery trucks into the accounting system, the accountant did not want to calculate the expected salvage value for each...
-
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method....
-
Identify the three major functional areas of organizations and briefly describe how they inter-relate.
-
Which sorting algorithm would you not use under the following conditions? 1. The sort must be stable. 2. Data are in descending order by key. 3. Data are in ascending order by key. 4. Space is very...
-
Which of these formulas gives the maximum total number of nodes in a tree that has N levels? (Remember that the root is Level 0.) 1. N - 1 N 2.2 N 3.2 - 1 N+1 4.2
-
A sorting function is called to sort a list of 100 integers that have been read from a file. If all 100 values are zero, what would the execution requirements (in terms of Big-O notation) be if the...
-
Write a client Boolean function MatchingItems that determines whether a binary search tree and a sequential list contain the same values.
-
True or False? A heap must be a complete binary tree.
-
On its January l, 2013, balance sheet, Ericsson Corporation reports the following balances related to its investments: Trading investments...
-
Identify one local business that uses a perpetual inventory system and another that uses a periodic system. Interview an individual in each organization who is familiar with the inventory system and...
-
Calculate the dividends-received deduction and taxable income for each independent scenario below. Assume there are no other income or deduction items. a. During the current year, Purple Corporation...
-
On May 15 of the current year, the board of directors of Georgia Corporation authorized a $40,000 donation to a qualified charity. The corporation donated the $40,000 to the charity on December 1 of...
-
Calculate Ajax Corporations regular tax liability for the following amounts of taxable income: a. $90,000 b. $300,000 c. $5 million d. $12 million e. $17 million f. $20 million g. Alternatively, for...
-
Managers are reluctant to change dividend. But what if the firm is having a difficult year and it seems also impossible to maintain the current level of dividend. Should the firm borrow to pay...
-
A 7% annual coupon bond (face value $1,000), with three years left till maturity is selling for $986.90. Zero-coupon bonds of 1, 2, 3 years maturity (all with face value of $1,000) sell for $950,...
-
Seven months ago, Mrs. Shaphiro took a long position in a forward contract on the stock of AIG at the forward price of $88. Five months ago, Mrs. Shapiro bought a put option on the stock of AIG with...
Study smarter with the SolutionInn App