The company estimates a residual value of $1,500 and a six-year service life.
It is given that,
Cost of truck delivery = $ 23100
Salvage value = $ 1500
Useful life = 6 years
Depreciation expenses by using the straight-line method are calculated as,
[tex]Depreciation\text{ expenses p.a = }\frac{cost\text{ - salvage value }}{useful\text{ life}}[/tex]Substituting the value in the formula,
[tex]\begin{gathered} Depreciation\text{ expenses p.a = }\frac{23100\text{ - 1500}}{6} \\ Depreciation\text{ expenses p.a = }\frac{21600}{6} \\ Depreciation\text{ expenses p.a = 3600} \end{gathered}[/tex]Thu
