Q1) A catering company buys a delivery truck for $34000 for its everyday business. The lifetime of the truck is estimated Five years and the production life in Kilometers is 200 000 KM. The residual value at the end of its lifetime is $4000. The truck has the following production in five years. Year 1 30 000 KM Year 2 40 000 KM Year 3 50 000 KM Year 4 70 000 KM Year 5 10 000 KM Requirements: Compute the Depreciation Expense under the following methods. Double Declining Balance Method. Sum-of-year-digit Method
Q1) A catering company buys a delivery truck for $34000 for its everyday business. The lifetime of the truck is estimated Five years and the production life in Kilometers is 200 000 KM. The residual value at the end of its lifetime is $4000. The truck has the following production in five years. Year 1 30 000 KM Year 2 40 000 KM Year 3 50 000 KM Year 4 70 000 KM Year 5 10 000 KM Requirements: Compute the Depreciation Expense under the following methods. Double Declining Balance Method. Sum-of-year-digit Method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q1) A catering company buys a delivery truck for $34000 for its everyday business. The lifetime of the truck is estimated Five years and the production life in Kilometers is 200 000 KM. The residual value at the end of its lifetime is $4000. The truck has the following production in five years.
|
Year 1 |
30 000 KM |
|
Year 2 |
40 000 KM |
|
Year 3 |
50 000 KM |
|
Year 4 |
70 000 KM |
|
Year 5 |
10 000 KM |
Requirements:
Compute the
- Double Declining Balance Method.
- Sum-of-year-digit Method
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