Using the straight-line depreciation method, which amount is depreciated for the van?

Using the straight-line depreciation method, which amount is depreciated for the van?

• A. $28,000 minus the salvage value
• B. $28,000 plus the salvage value
• C. $2,800
• D. $28,000

Answer: (D)

In straight-line depreciation, you depreciate the depreciable base, which is the asset’s cost minus its estimated salvage value, and you divide that amount evenly over the asset’s useful life. The question asks the total amount that will be depreciated for the van. If the salvage value is zero, the depreciable base equals the full cost, so the total amount depreciated is 28,000. If the salvage value were greater than zero, the depreciable amount would be smaller than 28,000 because you subtract salvage from cost. The other options either would add salvage value or imply a different, non-base figure, but the proper concept is cost minus salvage value, with zero salvage making the total depreciation equal to the full cost.

In straight-line depreciation, you depreciate the depreciable base, which is the asset’s cost minus its estimated salvage value, and you divide that amount evenly over the asset’s useful life. The question asks the total amount that will be depreciated for the van. If the salvage value is zero, the depreciable base equals the full cost, so the total amount depreciated is 28,000. If the salvage value were greater than zero, the depreciable amount would be smaller than 28,000 because you subtract salvage from cost. The other options either would add salvage value or imply a different, non-base figure, but the proper concept is cost minus salvage value, with zero salvage making the total depreciation equal to the full cost.