Accounting /Math

Question

Apple co bought a car with an estimated life of 5 years for $!2,000. The residual value of the car is $ 2.000. What will be the amount of depreciation expense each year using the straight line method ? If the car was bought on April 3, what would be the depreciation for the first year?

Answer 1

Straight line Depreciation

Book Value - Residual Value / Est Useful Life

12000 - 2000 = 10000 / 5

2000 annually

Only had the car 9 months out of 12 months...

2000 * 9 / 12

1500.00

Note - If you want to be more specific you can count the days you had the car and divide by 360 days (year)