Ram Corporation purchased a new truck on January 1, 2020 for $50,000. The truck is expected to last five years with a residual value of $10,000. Using straight-line depreciation, show the effect on the income statement and balance sheet of this transaction over the next five years.

Income statement

2020 2021 2022 2023 2024

Depreciation expense $ $ $ $ $

Balance Sheet

2020 2021 2022 2023 2024

Equipment $ $ $ $ $

Less: accumulated

Depreciation ( ) ( ) ( ) ( ) ( )

Book value $ $ $ $ $