Depreciation for Partial PeriodsNorman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000 miles in 2016 and 11,700 miles in 2017. Norman computesdepreciation to the nearest whole month.Required:1. Compute depreciation expense for 2016 and 2017 using theFor interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar.a. Straight-line method20162017b. Sum-of-the-years'-digits method20162017%24c. Double-declining-balance method201620172$d. Activity method20162017 2017d. Activity method201620172$2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017?(Round your answers to the nearest dollar.)a. Straight-line method20162017b. Sum-of-the-years'-digits method20162017c. Double-declining-balance method20162017d. Activity method201620172$3. The book value of the asset in the early years of the asset's service will beunder an accelerated method as compared to the straight-line method. Themethod is appropriate when the service life of the asset is affected primarily by the amountthe asset is used.

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Description: Depreciation for Partial PeriodsNorman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000

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Norman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000 miles in 2016 and 11,700 miles in 2017. Norman computes depreciation to the nearest whole month. Required: 1. Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar. a. Straight-line method 2016 2017 b. Sum-of-the-years'-digits method 2016 2017 c. Double-declining-balance method 2016 2017 d. Activity method 2016 2017

Norman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000 miles in 2016 and 11,700 miles in 2017. Norman computes depreciation to the nearest whole month. Required: 1. Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar. a. Straight-line method 2016 2017 b. Sum-of-the-years'-digits method 2016 2017 c. Double-declining-balance method 2016 2017 d. Activity method 2016 2017

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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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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Question

Depreciation for Partial Periods
Norman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000 miles in 2016 and 11,700 miles in 2017. Norman computes
depreciation to the nearest whole month.
Required:
1. Compute depreciation expense for 2016 and 2017 using the
For interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar.
a. Straight-line method
2016
2017
b. Sum-of-the-years'-digits method
2016
2017
%24
c. Double-declining-balance method
2016
2017
2$
d. Activity method
2016
2017

2017
d. Activity method
2016
2017
2$
2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017?
(Round your answers to the nearest dollar.)
a. Straight-line method
2016
2017
b. Sum-of-the-years'-digits method
2016
2017
c. Double-declining-balance method
2016
2017
d. Activity method
2016
2017
2$
3. The book value of the asset in the early years of the asset's service will be
under an accelerated method as compared to the straight-line method. The
method is appropriate when the service life of the asset is affected primarily by the amount
the asset is used.

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