Answer please Everwood Logistics purchased a van for $40,000 on January 1, 2024.The van has an estimated useful life of 5 years or 120,000 miles, with asalvage value of $6,000.Requirements:1. Compute the depreciation expense per mile using the units-of-production method.2. If the van is driven 24,000 miles in the first year, calculate thedepreciation expense for Year 1.

Step 1: Definition of Units-of-Production Depreciation MethodThe Units-of-Production Depreciation…

Answered: Everwood Logistics purchased a van for…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EA: Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is...

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Similar questions

Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
Montello Inc. purchases a delivery truck for $23,051. The truck has a salvage value of $4,562 and is expected to be driven for 132,141 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 20,068 miles. Calculate the annual depreciation expense. Round to the nearest penny, two decimal places.
On January 1, 2024, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles. Required: Calculate annual depreciation for the five-year life of the van using each of the following methods. 3. Units of production using miles driven as a measure of output, and the following actual mileage: Note: Do not round intermediate calculations. Year miles depreciation 2024 22000 6600 2025 24000 7200 2026 15000 4500 2027 20000 6000 2028 21000 _____ and it is not 6300
Finx, Inc., purchased a truck for $35,000. The truck is expected to be driven 15,000 miles per yearover a five-year period and then sold for approximately $5,000. Determine depreciation for thefirst year of the truck’s useful life by the straight-line and units-of-output methods if the truck isactually driven 16,000 miles.
Flower Power, Inc purchases a van for making deliveries for $24,400. The company estimates a four-year service life and a residual value of $1,900. During the four-year period, the company expects to drive the van 108,000 miles. Calculate annual depreciation for the four-year life of the van using each of the following methods. 1. Straight-line. deprediation expense: _________ 2. Double-declining-balance. (Round your depreciation rate to 2 decimal places. Round your final answers to the nearest whole dollar.) year|. depreciation expence| accum. depreciation| book value 1 2 3 4 total 3. Actual miles driven each year were 18,000 miles in Year 1; 32,000 miles in Year 2; 24,000 miles in Year 3; and 25,000 miles in Year 4. Note that actual total miles of 99,000 fall short of expectations by 9,000 miles. Calculate annual depreciation for the four-year life of the van using activity-based. (Round your depreciation rate to 2 decimal places.) year|. depreciation expence| accum.…
Questions # 24-27 are based on the information below: Chubbyville purchases a delivery van for $23,500. Chubbyville estimates a four-year service life and a residual value of $2,500. During the four-year period, the company expects to drive the van 105,000 miles. Actual miles driven were 24,000 miles in Year 1 and 26,000 miles in Year 2. 24. Using the straight-line method, what is the depreciation expense for year 2? A. $5,250 B. $5,875 C. $10,500 D. $11,750 25. Using the straight-line method, what is the book value at the end of year 3? A. $9,750 B. $10,550 C. $7,750 D. $8,250 26. Using double-declining balance method, what is the depreciation expense for year 1? A. $5,250 B. $5,875 C. $11,250 D. $11,750 27. Using the activity-based method, what is the balance in accumulated depreciation at the end of year 2? A. $10,000 B. $4,800 C. $5,200 D. $13,500

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