Cork oak corporation purchased a heavy-duty truck (not considered a passenger automobile for purposes of the listed property and luxury automobile limitations) on may 1, 2018 for use in its business. the truck, with a cost basis of $24,000, has a 5-year estimated life. it also is 5-year recovery property. how much depreciation should be taken on the truck for the 2018 calendar tax year using the conventional (for financial accounting purposes) straight-line depreciation method?

Cost of truck / expected useful life= 24,000 / (5 year × 12 months)= 400 dollar per month 400×8= 3200 dollar

Explanation:

Considering no salvage value of the truck at the end of the 5-year period and need for 8 month period of depreciation (from May 1 till the end of the year) we use formula of straight line method: Cost of truck / expected useful life= 24,000 / (5 year × 12 months)= 400 dollar per month. And in order to find taken accumulated depreciation for 8 months of 2018: 400×8= 3200 dollar. At the end of 2018 we should write off 3200 dollar from the value of truck.

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