Norman Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 90,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 14,000 miles in 2020. Norman computes depreciation expense to the nearest whole month.
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.
Norman Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 90,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 14,000 miles in 2020. Norman computes
![### Depreciation Methods for Book Value Calculation
#### Problem Statement
Determine the book value of the machine at the end of 2019 and at the end of 2020 using the following depreciation methods. Please round your answers to the nearest dollar.
#### Methods
a. **Straight-line Method**
- **2019:** $ [Input Box]
- **2020:** $ [Input Box]
b. **Sum-of-the-years'-digits Method**
- **2019:** $ [Input Box]
- **2020:** $ [Input Box]
c. **Double-declining-balance Method**
- **2019:** $ [Input Box]
- **2020:** $ [Input Box]
d. **Activity Method**
- **2019:** $ [Input Box]
- **2020:** $ [Input Box]
#### Note
Each method above reduces the value of the machine over time, taking into account factors such as time and usage differently. Please ensure calculations are accurate and rounded to the nearest dollar as specified.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa1a82d89-b6b3-4242-8dac-f51efd09cdfb%2F3e4f0dbe-6de3-4da6-bc08-c8fe02416a36%2Fcnr3ysf_processed.png&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
