Compute depreciation using units-of-production method with residual value FlavorRite purchased a used van for use in its business on January 1, 2020. Consider the following information. Van's purchase price Van's residual value Van's useful life Expected miles in 2020 Expected miles in 2021 Expected miles in 2022 Expected miles in 2023 Total expected miles $ 17,000 $ 1,400 4 16,000 19,000 17,000 48,000 100,000 years Use the blue showed areas on the ENTERANSW.SBS tab for ingets EV Requirement Using the units-of-production method of depreciation (with miles as the production unit), calculate the depreciation expense, accumulated depreciation balance, and book value for each of the four years of the van's useful life. a. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values to be subtracted. b. Use cell references from prior calculations, if applicable.
Compute depreciation using units-of-production method with residual value FlavorRite purchased a used van for use in its business on January 1, 2020. Consider the following information. Van's purchase price Van's residual value Van's useful life Expected miles in 2020 Expected miles in 2021 Expected miles in 2022 Expected miles in 2023 Total expected miles $ 17,000 $ 1,400 4 16,000 19,000 17,000 48,000 100,000 years Use the blue showed areas on the ENTERANSW.SBS tab for ingets EV Requirement Using the units-of-production method of depreciation (with miles as the production unit), calculate the depreciation expense, accumulated depreciation balance, and book value for each of the four years of the van's useful life. a. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values to be subtracted. b. Use cell references from prior calculations, if applicable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Year
5 Start
01
6
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9
10
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Depreciation
expense
2020 $
2,496.00
2021 $ 2,964.00
2022 $
2,652.00
2023
$
7,488.00
Accumulated
depreciation Book value
$ 17,000
INSTRUCTIONS ENTERANSWERS
Transcribed Image Text:A B
D
1 Plant Assets, Natural Resources, & Intangibles
2 Compute depreciation using units-of-production method with residual value
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Van's purchase price
Van's residual value
Van's useful life
Expected miles in 2020
Expected miles in 2021
Expected miles in 2022
Expected miles in 2023
Total expected miles
$ 17,000
$ 1,400
4
16,000
19,000
17,000
48,000
100,000
E
FlavorRite purchased a used van for use in its business on January 1, 2020. Consider the following
information.
24 Saving & Submitting Solution
25
1 Save file to desktop.
F
years
Use the blue sh-ded areas on the ENTERANSWERS tab for inputs
ways
INSTRUCTIONS
G
18 Requirement
Using the units-of-production method of depreciation (with miles as the production unit), calculate the
depreciation expense, accumulated depreciation balance, and book value for each of the four years of the
van's useful life.
H
I
ENTERANSWERS
a. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values to be
subtracted.
b. Use cell references from prior calculations, if applicable.
J
K
L
I
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