Skysong, Inc. acquires a delivery truck at a cost of $54,000. The truck is expected to have a salvage value of $13,000 at the end of its 5-year useful life. Compute annual depreciation expense for the first and second years using the straight-line method.

Annual depreciation= $8,200

Explanation:

Giving the following information:

Skysong, Inc. acquires a delivery truck for $54,000. The truck is expected to have a salvage value of $13,000 at the end of its 5-year useful life.

To calculate the depreciation expense, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (54,000 - 13,000)/5

Annual depreciation= $8,200

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