A small truck is purchased for $22,000. It is expected to be of use to the company for 9 years, after which it will be sold for $4,000. Determine the depreciation deduction and the resulting unrecovered investment during each year of the asset’s life. Part a Use straight-line depreciation: EOY Depreciation Deduction Unrecovered Investment 0 $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10. Part b Use declining balance depreciation using a rate that ensures the book value equals the salvage value: EOY Depreciation Deduction Unrecovered Investment 0 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount Part c Use sum-of-years'-digits depreciation: EOY Depreciation Deduction Unrecovered Investment 0 $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount Part d Use double declining balance depreciation: EOY Depreciation Deduction Unrecovered Investment 0 $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount
A small truck is purchased for $22,000. It is expected to be of use to the company for 9 years, after which it will be sold for $4,000. Determine the depreciation deduction and the resulting unrecovered investment during each year of the asset’s life. Part a Use straight-line depreciation: EOY Depreciation Deduction Unrecovered Investment 0 $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10. Part b Use declining balance depreciation using a rate that ensures the book value equals the salvage value: EOY Depreciation Deduction Unrecovered Investment 0 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount Part c Use sum-of-years'-digits depreciation: EOY Depreciation Deduction Unrecovered Investment 0 $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount Part d Use double declining balance depreciation: EOY Depreciation Deduction Unrecovered Investment 0 $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount 2 $enter a dollar amount $enter a dollar amount 3 $enter a dollar amount $enter a dollar amount 4 $enter a dollar amount $enter a dollar amount 5 $enter a dollar amount $enter a dollar amount 6 $enter a dollar amount $enter a dollar amount 7 $enter a dollar amount $enter a dollar amount 8 $enter a dollar amount $enter a dollar amount 9 $enter a dollar amount $enter a dollar amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A small truck is purchased for $22,000. It is expected to be of use to the company for 9 years, after which it will be sold for $4,000. Determine the
Part a
Use straight-line depreciation:
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.
|
EOY |
Depreciation Deduction |
Unrecovered Investment |
|---|---|---|
|
0
|
$enter a dollar amount | |
|
1
|
$enter a dollar amount | $enter a dollar amount |
|
2
|
$enter a dollar amount | $enter a dollar amount |
|
3
|
$enter a dollar amount | $enter a dollar amount |
|
4
|
$enter a dollar amount | $enter a dollar amount |
|
5
|
$enter a dollar amount | $enter a dollar amount |
|
6
|
$enter a dollar amount | $enter a dollar amount |
|
7
|
$enter a dollar amount | $enter a dollar amount |
|
8
|
$enter a dollar amount | $enter a dollar amount |
|
9
|
$enter a dollar amount | $enter a dollar amount |
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.
Part b
Use declining balance depreciation using a rate that ensures the book value equals the salvage value:
|
EOY |
Depreciation Deduction |
Unrecovered Investment |
|---|---|---|
|
0
|
||
|
1
|
$enter a dollar amount | $enter a dollar amount |
|
2
|
$enter a dollar amount | $enter a dollar amount |
|
3
|
$enter a dollar amount | $enter a dollar amount |
|
4
|
$enter a dollar amount | $enter a dollar amount |
|
5
|
$enter a dollar amount | $enter a dollar amount |
|
6
|
$enter a dollar amount | $enter a dollar amount |
|
7
|
$enter a dollar amount | $enter a dollar amount |
|
8
|
$enter a dollar amount | $enter a dollar amount |
|
9
|
$enter a dollar amount | $enter a dollar amount |
Part c
Use sum-of-years'-digits depreciation:
|
EOY |
Depreciation Deduction |
Unrecovered Investment |
|---|---|---|
|
0
|
$enter a dollar amount | |
|
1
|
$enter a dollar amount | $enter a dollar amount |
|
2
|
$enter a dollar amount | $enter a dollar amount |
|
3
|
$enter a dollar amount | $enter a dollar amount |
|
4
|
$enter a dollar amount | $enter a dollar amount |
|
5
|
$enter a dollar amount | $enter a dollar amount |
|
6
|
$enter a dollar amount | $enter a dollar amount |
|
7
|
$enter a dollar amount | $enter a dollar amount |
|
8
|
$enter a dollar amount | $enter a dollar amount |
|
9
|
$enter a dollar amount | $enter a dollar amount |
Part d
Use double declining balance depreciation:
|
EOY |
Depreciation Deduction |
Unrecovered Investment |
|---|---|---|
|
0
|
$enter a dollar amount | |
|
1
|
$enter a dollar amount | $enter a dollar amount |
|
2
|
$enter a dollar amount | $enter a dollar amount |
|
3
|
$enter a dollar amount | $enter a dollar amount |
|
4
|
$enter a dollar amount | $enter a dollar amount |
|
5
|
$enter a dollar amount | $enter a dollar amount |
|
6
|
$enter a dollar amount | $enter a dollar amount |
|
7
|
$enter a dollar amount | $enter a dollar amount |
|
8
|
$enter a dollar amount | $enter a dollar amount |
|
9
|
$enter a dollar amount | $enter a dollar amount |
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