Depreciation MethodsA delivery truck costing $20,000 is expected to have a $2,000 salvage value atthe end of its useful life of four years or 100,000 miles. Assume that the truckwas purchased on January 2. Calculate the depreciation expense for the secondyear using each of the following depreciation methods: (a) straight-line, (b)double-declining balance, and (c) units-of-production. (Assume that the truckwas driven 30,000 miles in the second year) Round all answers to the nearestdollar.a. Straight-lineb. Double-declining balance $c. Units-of-production00

Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Answered: Depreciation Methods A delivery truck…

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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Units-of-activity Depreciation A truck acquired at a cost of $225,000 has an estimated residual value of $14,100, has an estimated useful life of 37,000 miles, and was driven 3,000 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $fill in the blank 1 (b) The depreciation rate $fill in the blank 2 per mile (c) The units-of-activity depreciation for the year $fill in the blank 3
Revision of Depreciation A truck with a cost of $123,000 has an estimated residual value of $24,000, has an estimated useful life of 12 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation.$8250 b. Determine the book value at the end of the seventh year of use.$65250 c. Assuming that at the start of the eighth year the remaining life is estimated to be five years and the residual value is estimated to be $15,000, determine the depreciation expense for each of the remaining five years.$
Straight-Line, Declining-Balance, Sum-Of-The-Years'-Digits, and MACRS Methods A machine is purchased January 1 at a cost of $59,000. It is expected to serve for eight years and have a salvage value of $3,000. Required: 1. Prepare a schedule showing depreciation for each year and the book value at the end of each year using the following methods a. Straight-line
Revision of Depreciation A building with a cost of $630,000 has an estimated residual value of $126,000, has an estimated useful life of 36 years, and is depreciated by the straight-line method. a. What is the amount of the annual depreciation? b. What is the book value at the end of the twentieth year of use? c. If at the start of the twenty-first year it is estimated that the remaining life is 20 years and that the residual value is $30,000, what is the depreciation expense for each of the remaining 20 years?
A piece of heavy equipment acquired on January 1 at a cost of $180,000 has an estimated useful life of 25 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years ending December 31 by the straight-line method. Round your answer to the nearest cent if rounding is required. Depreciation First year $fill in the blank 1 Second year $fill in the blank 2 b. Determine the depreciation for each of the first two years ending December 31 by the double-declining-balance method. Round your answer to the nearest cent if rounding is required. Depreciation First year $fill in the blank 3 Second year $fill in the blank 4
Revision of depreciation. Equipment with a cost of $698,500 has an estimated residual value of $63,500, has an estimated useful life of 25 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. $ b. Determine the book value after 13 full years of use. c. Assuming that at the start of the year 14 the remaining life is estimated to be 18 years and the residual value is estimated to be $53,300, determine the depreciation expense for each of the remaining 18 years.
A Kubota tractor acquired on January 8 at a cost of $54,000 has an estimated useful life of 10 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year $ b. Determine the depreciation for each of the first two years by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your final answers to the nearest dollar. First Year Second Year
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Straight-Line Depreciation A building acquired at the beginning of the year at a cost of $134,200 has an estimated residual value of $5,200 and an estimated useful life of 10 years. Determine the following: (a) The depreciable cost (b) The straight-line rate % (c) The annual straight-line depreciation
A machine with a cost of $66,200.00 has an estimated residual value of $3,201.00 and an estimated life of 5 years or 18,256 hours. What is the amount of depreciation for the second full year, using the double declining-balance method? Select the correct answer. a.) $15,888.00 b.) $26,480.00 c.) $13,240.00 d.) $25,199.60

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