On January 1, 2021, 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.
On January 1, 2021, 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2021, 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: (Do not round intermediate
calculations.)
Year
Miles
Depreciation
2021
22,000
2022
24,000
2023
15,000
2024
20,000
2025
21,000
Total
$
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