PROBLEM 17-1A At the beginning of a fiscal year, Flowers Company buys a truck for $28,000. The truck's estimated life is five years, and its estimated salvage value is $3,000. Required Using the following four methods, determine the annual depreciation of the truck for each of the estimated five years of life, the accumulated depreciation at the end of each and the book value of the truck at the end of each year. Round annual depreciation year, to whole dollars. a. Straight-line method b. Double-declining-balance method c. Units-of-production method (Useful life is 100,000 miles. Year1 use is 10,000 miles, Year 2 use is 20,000 miles, Year 3 use is 40,000 miles, Year 4 use is 18,000 miles, and Year 5 use is 12,000 milęs.) Round depreciation per unit to two decimal places. Year 5 depreciation should be rounded to balance. d. MACRS method (Assume that the asset was purchased after 1986 and is five-year property.) Year 6 depreciation should be rounded to balance.
PROBLEM 17-1A At the beginning of a fiscal year, Flowers Company buys a truck for $28,000. The truck's estimated life is five years, and its estimated salvage value is $3,000. Required Using the following four methods, determine the annual depreciation of the truck for each of the estimated five years of life, the accumulated depreciation at the end of each and the book value of the truck at the end of each year. Round annual depreciation year, to whole dollars. a. Straight-line method b. Double-declining-balance method c. Units-of-production method (Useful life is 100,000 miles. Year1 use is 10,000 miles, Year 2 use is 20,000 miles, Year 3 use is 40,000 miles, Year 4 use is 18,000 miles, and Year 5 use is 12,000 milęs.) Round depreciation per unit to two decimal places. Year 5 depreciation should be rounded to balance. d. MACRS method (Assume that the asset was purchased after 1986 and is five-year property.) Year 6 depreciation should be rounded to balance.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:CHAPTER 17
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
Problem Set A
For additional help, see the demonstration problem at the beginning of each chapter in
your Working Papers.
LO
PROBLEM 17-1A At the beginning of a fiscal year, Flowers Company buys a truck
for $28,000. The truck's estimated life is five years, and its estimated salvage value is
$3,000.
Required
Using the following four methods, determine the annual depreciation of the truck for
each of the estimated five years of life, the accumulated depreciation at the end of each
year, and the book value of the truck at the end of each year. Round annual depreciation
to whole dollars.
Check Figure
Double-declining-balance
method, bok value at
end of Year 4, $3,629
a. Straight-line method
b. Double-declining-balance method
Units-of-production method (Useful life is 100,000 miles. Year 1 use is 10,000
miles, Year 2 use is 20,000 miles, Year 3 use is 40,000 miles, Year 4 use is 18,000
miles, and Year 5 use is 12,000 miles.) Round depreciation per unit to two decimal
places. Year 5 depreciation should be rounded to balance.
d. MACRS method (Assume that the asset was purchased after 1986 and is five-year
property.) Year 6 depreciation should be rounded to balance.
LO 3, 4, 5
alatod the follouring
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