Let s say a company purchases a delivery van fo... - SS1 Accounting Provision For Depreciation On Fixed Assets: Meaning And Calculation of Depreciation Question

Let's say a company purchases a delivery van for ₦2,000,000 with a useful life of 8 years. The salvage value of the van is estimated to be ₦200,000. What is the depreciation expense per year using the straight-line method?

Ask EduPadi AI for a Detailed Answer

To calculate the answer, we use the straight-line method formula:

Depreciation expense per year = (Cost of the asset - Salvage value) / Useful life

Substituting the given values:

Depreciation expense per year = (₦2,000,000 - ₦200,000) / 8 years

Depreciation expense per year = ₦225,000

Therefore, the depreciation expense per year is ₦225,000

Please share this, thanks:

#SS1 #SS1