On July 1, 2020, Molly's Greenhouse purchased a new delivery truck for $96,000. She paid a $20,000 cash and signed a promissory note for the remainder. Molly estimates that the delivery truck will have a five-year useful life, or 225,000 kilometres and a residual value of $6,000. Molly's Greenhouse has a December 31 year end. Molly drove the truck 16.000 km in 2020: 45,000 km in 2021 47,000 in 2022: 44,000 in 2023, and 74,000 in 2024. Prepare depreciation schedules for the life of the asset under the following depreciation methods: 1. 2 straight-line method double-diminishing-balance, and 3. units-of-production method (Round depreciable amount per unit to 2 decimal places, es 5.27 and the final answers to 0 decimal places, eg 5,276)
On July 1, 2020, Molly's Greenhouse purchased a new delivery truck for $96,000. She paid a $20,000 cash and signed a promissory note for the remainder. Molly estimates that the delivery truck will have a five-year useful life, or 225,000 kilometres and a residual value of $6,000. Molly's Greenhouse has a December 31 year end. Molly drove the truck 16.000 km in 2020: 45,000 km in 2021 47,000 in 2022: 44,000 in 2023, and 74,000 in 2024. Prepare depreciation schedules for the life of the asset under the following depreciation methods: 1. 2 straight-line method double-diminishing-balance, and 3. units-of-production method (Round depreciable amount per unit to 2 decimal places, es 5.27 and the final answers to 0 decimal places, eg 5,276)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On July 1, 2020, Molly's Greenhouse purchased a new delivery truck for $96,000. She paid a $20,000 cash and signed a promissory
note for the remainder. Molly estimates that the delivery truck will have a five-year useful life, or 225,000 kilometres and a residual
value of $6,000. Molly's Greenhouse has a December 31 year end. Molly drove the truck 16,000 km in 2020: 45,000 km in 2021
47,000 in 2022: 44,000 in 2023, and 74,000 in 2024.
Prepare depreciation schedules for the life of the asset under the following depreciation methods:
1. straight-line method
2.
double-diminishing-balance, and
3. units-of-production method
(Round depreciable amount per unit to 2 decimal places, eg 5.27 and the final answers to O decimal places, eg 5,276)
1. STRAIGHT-LINE METHOD
Year
Truck
Depreciable
Amount
Depreciation
Rate
Fraction
of a Year.
Depreciation
Expense
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