A company purchased a new truck at a cost of $42,000 on June 1, 2019. The truck is estimated to have a useful life of 7 years. The company uses the straight-line method of depreciation. So, the annual depreciation expense is $6,000. How much depreciation expense will be recorded for the truck during the first year ended December 31? Select one: a. $6,000. B. $45,000. C. $3,500. D. $3,000.

C. $3,500

Explanation:

The formula for a straight-line method of depreciation is provided  below:

annual depreciation charge=(cost-salvage value)/useful life

cost of the new truck=$42,000

salvage value=$0

useful life=7 years

depreciation=($42,000-$0)/7=$6,000( same as given in the question)

The truck was used for 7 months in the first year ended, from June 1 2019 to December 31 2019

Depreciation for the first year=$6000*7/12=$3,500

statement of owner"s equity;

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.