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Hello students, here is a question.
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A truck with a cost of $80 ,000 has estimated residual value of $15 ,000.
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An estimated useful life is 8 years and it is depreciated by straight line method.
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So, we have three sub questions to solve.
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The first is determine the amount of annual depreciation.
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So, to determine the value of annual depreciation, we use a formula to calculate that is total depreciation is equal to initial cost minus residual value, so the amount is $80 ,000 minus $15 ,000 which gives us $65 ,000.
00:50
Now, we can find the annual depreciation.
00:54
So, that is annual depreciation is equal to total depreciation minus residual depreciation, total depreciation divided by useful life, useful life, the values are $65 ,000 divided by 8 years.
01:22
So, the answer is $8 ,125 per year.
01:31
Now, we will see the second sub question, determine the book of value at the end of fourth year to use, that is rb question...