Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018. The purchase price was $22,600 and had a useful life of 3 years. The salvage or residual amount is 5% of the purchase price. Katie estimated that the car would be driven for 93,000 total miles. In year 1, the car was driven 48,900 miles. In year 2, the car was driven 35,180 miles, and in year 3, the car was driven 12,300 miles. Round the cost per mile to two decimal places. Calculate the total depreciation expense in Years 1 through 3 using the units of activity (production) method.
Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018. The purchase price was $22,600 and had a useful life of 3 years. The salvage or residual amount is 5% of the purchase price. Katie estimated that the car would be driven for 93,000 total miles. In year 1, the car was driven 48,900 miles. In year 2, the car was driven 35,180 miles, and in year 3, the car was driven 12,300 miles. Round the cost per mile to two decimal places. Calculate the total depreciation expense in Years 1 through 3 using the units of activity (production) method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Katie, your
- The purchase price was $22,600 and had a useful life of 3 years.
- The salvage or residual amount is 5% of the purchase price.
- Katie estimated that the car would be driven for 93,000 total miles.
- In year 1, the car was driven 48,900 miles. In year 2, the car was driven 35,180 miles, and in year 3, the car was driven 12,300 miles.
Round the cost per mile to two decimal places. Calculate the total depreciation expense in Years 1 through 3 using the
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