KK company bought a delivery truck for $62,000 on January 1, 2009. They installed a rear hydraulic lift for $8,000 and paid sales tax of $3,000. In addition, KK paid $2,400 for a one-year insurance policy and $500 for registration fees. They estimate the useful life of the truck to be 10 years and its residual value to be $8,000. If KK uses the straight-line method of depreciation, what is the depreciation expense and book value at the end of 2010?
a. $7,300 and $58,400
b. $6,500 and $60,000
c. $6,790 and $62,320
d. $6,550 and $60,400
Ans: b. $6,500 and $60,000
Business
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