Golden Bakery acquires a delivery truck for $60,000 and anticipates using it for eight years, at which

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Golden Bakery acquires a delivery truck for $60,000 and anticipates using it for eight years, at which time it will have logged 500,000 kilometres. Currently, market conditions suggest that a used truck with 500,000 kilometres on the odometer sells for $4,000. The company anticipates using the truck for about the same amount each year and therefore believes that the straight line method is appropriate. After using and depreciating the truck for three years, management believes that the truck will remain useful for a total of 10 years, after which the residual value will be $2,000.


Required:
Compute the amount of depreciation in the third and fourth years.

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Intermediate Accounting

ISBN: 9787300071374

3rd Edition Vol. 1

Authors: Kin Lo, George Fisher

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