Account for depreciation expense. (LO 1, 3)

Thomas Toy Company purchased a new delivery truck on January 1,2006 , for \(\$ 25,000\). The truck is estimated to last for 6 years and will then be sold, at which time it should be worth approximately \(\$ 1,000\). The company uses straight-line depreciation and has a fiscal yearend of December 31 .

1. How much depreciation expense will be shown on the income statement for the year ended December 31, 2008 ?

2. What is the book value (also called carrying value) of the truck on the balance sheet for each of the 6 years beginning with December 31, 2006?