Acompany purchased a new delivery van at a cost of $59,000 on july 1. the delivery van is estimated to have a useful life of 5 years and a salvage value of $4,700. the company uses the straight-line method of depreciation. how much depreciation expense will be recorded for the van during the first year ended december 31?

Given Data:
Depreciation rate per year 1 / 5-year useful life = 20%
Salvage value = $4700
Purchase cost  = $59000

Step 1: Depreciable asset cost  = Purchase cost of – estimated salvage value

Depreciable asset cost = $59,000 – $4,700 
                                        = $54,300

Step 2: Annual depreciation = depreciation rate x depreciable asset cost

Annual depreciation = 20% x $59,000
                                   = $11,800

Therefore, depreciation expense recorded for the van during the first year ended December 31 is $11,800.