Erickson Electricity bought a utility truck for $70,000. The utility truck is expected to have an eight-year
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Erickson Electricity bought a utility truck for $70,000. The utility truck is expected to have an eight-year useful life and a salvage value of $6,000.
1. If Erickson sells the utility truck after four years for $40,000, would the company realize a gain or loss? How much? (Assume straight-line depreciation.)
2. What would the gain or loss be if the company sold the utility truck for $17,000 after six years?
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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1 Cost 70000 less salvage 6000 Depreciation cost 64000 Original estimated life 8 ...View the full answer
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