question 16 (5 points) a new vehicle was purchased on january 1 for $38,000. it has a salvage value of…

question 16 (5 points) a new vehicle was purchased on january 1 for $38,000. it has a salvage value of $7,000 and a useful life of 5 years. using the straight - line method, how much will the depreciation expense for the vehicle be for the first year (to the nearest dollar)? a) $633 b) $6,200 c) $7,600 d) $517

question 16 (5 points) a new vehicle was purchased on january 1 for $38,000. it has a salvage value of $7,000 and a useful life of 5 years. using the straight - line method, how much will the depreciation expense for the vehicle be for the first year (to the nearest dollar)? a) $633 b) $6,200 c) $7,600 d) $517

Answer

Explanation:

Step1: Determine depreciable amount

The depreciable amount is the cost minus salvage value. So, it is $38000 - 7000=31000$.

Step2: Calculate annual depreciation

Using the straight - line method, annual depreciation is depreciable amount divided by useful life. So, $\frac{31000}{5}=6200$.

Answer:

B. $6,200