A company purchased a delivery van for $18,200 with a salvage value of $2,200 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

A company purchased a delivery van for $18,200 with a salvage value of $2,200 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

$1,213.

$3,640.

$1,067.

$3,200.

$800.

Depreciation Expense = (Cost - Salvage Value)/Est Useful Life * Length of Ownership

Depreciation Expense = ($18,200 − $2,200)/5 × 4/12; Depreciation Expense = $1,067