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. A. Calculate the annual depreciation expense._______________  B.  What is the year one book value? ___________________

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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.

A. Calculate the annual depreciation expense._______________ 

B.  What is the year one book value? ___________________

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 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 13,000 miles.

C. Calculate the year one depreciation expense. ___________________

D. What is the year one book value? __________________

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 double-declining-balance depreciation method.

E. Calculate the year one depreciation expense. __________________

F. What is the year one book value? _______________

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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