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Financial Accounting

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E3-30A. Account for depreciation expense. (LO 1, 3). Maximus Dog Company purchased a new
supply van on January 1, 2011, for $35,000. The van is estimated to last for five years and will
then be sold, at which time it should be worth approximately $5,000. The company uses straight-
line depreciation and has a fiscal year end of December 31.
1. How much depreciation expense will be shown on the income statement for the year ended
December 31, 2011?
2. What is the book value (also called carrying value) of the van on the balance sheet for each five years beginning with December 31, 2011?

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