A tractor for over-the-road hauling is purchased for $75,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tracto life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 7080 book value for year 6 = $ 32520 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and b value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 4449.46 13348.39 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4915.20 book value for year 6 = $ 19660.80

A tractor for over-the-road hauling is purchased for $75,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tracto life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 7080 book value for year 6 = $ 32520 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and b value for year 6. Depreciation for year 6 = $ book value for year 6 = $ 4449.46 13348.39 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ 4915.20 book value for year 6 = $ 19660.80

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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