8. Calculate year 1 depreciation for the car purchase in #7, assuming a salvage value of $2500,a useful life of 5 years and 150,000 estimated useful life in miles - with 60,000 miles driven in year 1.Straight Line Depreciation:Declining balance depreciation:Units of Activity depreciation: 7. AB Company purchases a truck in the amount of $15,000. Additional costs include sales tax of $1500,painting of $2500, license of $150 and a 1 year auto insurance policy of $1200. Complete thejournal entry for the auto purchase.AccountDebitCreditTruck20,350Cash20,350

Name: 8. Calculate year 1 depreciation for the car purchase in #7, assuming
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Description: 8. Calculate year 1 depreciation for the car purchase in #7, assuming a salvage value of $2500,a useful life of 5 years and 150,000 estimated useful life in miles - with 60,000 miles driven in year 1.Straight Line Depreciation:Declining balance depr

Answer: Computation of Year 1 Straight line depreciation is as follows: Straight line depreciation =Cost - Salvage valueNo. of useful life=$20350 -$25005=$178505=$3570Computation of year 1 Declining balance depreciation is as follows: Depreciation = Cost ×1Useful life=$20350 ×15=$4070Computation of year 1 Units of activity depreciation: Unit of Activity Depreciation =Cost - Salvage valueTotal estimated useful life in miles×Miles driven in Year 1=$20350 -$2500150000×60000=$17850150000×60000=$7140

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Accounting

8. Calculate year 1 depreciation for the car purchase in #7, assuming a salvage value of $2500, a useful life of 5 years and 150,000 estimated useful life in miles - with 60,000 miles driven in year 1. Straight Line Depreciation: Declining balance depreciation: Units of Activity depreciation:

8. Calculate year 1 depreciation for the car purchase in #7, assuming a salvage value of $2500, a useful life of 5 years and 150,000 estimated useful life in miles - with 60,000 miles driven in year 1. Straight Line Depreciation: Declining balance depreciation: Units of Activity depreciation:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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