Required information [The following information applies to the questions displayed below.] On January 1, Speedy Delivery Company purchases a delivery van for $32,800. Speedy estimates that at the end of its four-year service life, the van will be worth $4,800. During the four-year period, the company expects to drive the van 175,000 miles. Actual miles driven each year were 45,000 miles in year 1 and 53,000 miles in year 2. Required: Calculate annual depreciation for the first two years using each of the following methods. (Do not round your intermediate calculations.) 1. Straight-line. Year 1 2 Annual Depreciation

Required information [The following information applies to the questions displayed below.] On January 1, Speedy Delivery Company purchases a delivery van for $32,800. Speedy estimates that at the end of its four-year service life, the van will be worth $4,800. During the four-year period, the company expects to drive the van 175,000 miles. Actual miles driven each year were 45,000 miles in year 1 and 53,000 miles in year 2. Required: Calculate annual depreciation for the first two years using each of the following methods. (Do not round your intermediate calculations.) 1. Straight-line. Year 1 2 Annual Depreciation

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 30P

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A company manager is considering purchasing a truck for transport and distribution of the company’s goods. The truck has an estimated service life of 18 years and its initial purchasing value is $ 60000. The annual earnings from the transport and the distribution of the goods are expected to change within the service life of the truck. That’s, at the end of the 1st, 7th and 14th years, each annual revenue will be $ 12000 and at the end of the other years, each annual revenue has again equal value but their values are different from $ 12000. Compute the unknown annual revenues to reach equilibrium on the cash flow series over the service life of the truck. (Assume annual interest rate of 8%).
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AU Removals’ financial year ends on 30 June each year. On 1 July 2019, AU Removals purchased a truck for $168,000. You are the accountant of the business and you have estimated that the truck is to last 15 years and to have $7,000 residual value at that point. As per the business plan, the truck can be used to drive 350,000 kilometres over the 15 years, with per-year projections of 21,000 km, 28,000 km, 25,200 km, respectively over the first three years. Required: Calculate the accumulated depreciation balance at the end of the second year using each of the following depreciation bases. Show your workings. Your calculations should be rounded to the nearest whole number dollar amount. 1. straight-line diminishing balance (19 per cent rate) units-of-production.
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Hayden Inc. has a number of copiers that were bought four years ago for $25,000. Currently maintenance costs $2,500 a year, but the maintenance agreement expires at the end of two years, and thereafter, the annual maintenance charge will rise to $8,500. The machines have a current resale value of $8,500, but at the end of year 2, their value will have fallen to $4,000. By the end of year 6, the machines will be valueless and would be scrapped.Hayden is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $30,000, and the company can take out an eight-year maintenance contract for $1,500 a year. The machines would have no value by the end of the eight years and would be scrapped.Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 40%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7%.a. Calculate the equivalent annual cost, if the copiers are: (i)…
Required information Skip to question [The following information applies to the questions displayed below.]Speedy Delivery Company purchases a delivery van for $36,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,400. During the four-year period, the company expects to drive the van 148,000 miles. Actual miles driven each year were 40,000 miles in year 1 and 46,000 miles in year 2. Required: Calculate annual depreciation for the first two years of the van using each of the following methods. (Do not round your intermediate calculations.) 1. Straight-line. year Anual depreciation 1 2
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