Reference no: EM132637031

Question - Early in the fiscal year, Longview contracted with a new landscape maintenance company at a monthly contract rate of $1,500. Personnel in the accounting department set up a vendor account for the new landscape company and properly coded the payment to an account titled contractual services. An error was made in coding the charge to the housekeeping department rather than the facilities department. Total charges recorded during the year totaled more than $10,000.

Jordan's Pharmacy offers free prescription delivery to customers. The pharmacy maintains its financial records on a calendar-year basis. At the end of June, Jordan's purchases a new delivery vehicle costing $20,000. They plan to use the vehicle in the business for 5 years and expect the vehicle will have a trade-in value after 5 years of $5,000. What is the annual charge for depreciation on this asset? How much depreciation would be taken in the year of purchase?