Calculate the annual depreciation expense for the van

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Question - Depreciation

Pixies Ltd is a small company that specialises in selling garden statues. The business needs to purchase an additional delivery van, as customers have been complaining that delivery times are too long. Management decides to purchase a van for £4,750.

The operations director estimated that the van will have a useful life of four years, and a second-hand value of £2,500 at the end of this time. The operations director proposes that the straight line method of depreciation be used for the van.

Required - Calculate the annual depreciation expense for the van, if Pixies Ltd uses the straight line method for calculation of depreciation. Show the full depreciation schedule and show the effect of accumulated depreciation on balance sheet.

Reference no: EM132571481

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