Carla Vista Pants Company acquires a delivery truck on April 6, 2021, at a cost of $40,000. The truck is expected to have a residual value of $7,200 at the end of its 4-year life. Carla Vista uses the nearest month method to pro-rate depreciation expense.

Carla Vista Pants Company acquires a delivery truck on April 6, 2021, at a cost of $40,000. The truck is expected to have a residual value of $7,200 at the end of its 4-year life. Carla Vista uses the nearest month method to pro-rate depreciation expense. Calculate annual depreciation expense for the first and second years using straight-line depreciation, assuming Carla Vista has a calendar year end. Depreciation - 2021 $ Depreciation - 2022 $