**Depreciation Methods for Educational Purposes***Scenario Description:*Speed, Inc. is a shipping company. On 1/1/2020, the company purchases a new commercial sleeper truck for $740,000 cash. The expected residual value of the truck is $70,000 and the expected useful life is 8 years. The company estimates that the truck will be used to drive 1,000,000 miles over its useful life (150,000 miles in 2020; 110,000 miles in 2021 & all subsequent years).For the units-of-activity method, round the depreciation-per-unit to two decimal places before using it.---### PART A - STRAIGHT LINE DEPRECIATION**Income Statement**- **Depreciation Expense** - Year Ended 12/31/2020: [Input box] - Year Ended 12/31/2021: [Input box]**Balance Sheet**- **Accumulated Depreciation** - As of 12/31/2020: [Input box] - As of 12/31/2021: [Input box]---### PART B - UNITS-OF-ACTIVITY DEPRECIATION**Income Statement**- **Depreciation Expense** - Year Ended 12/31/2020: [Input box] - Year Ended 12/31/2021: [Input box]**Balance Sheet**- **Accumulated Depreciation** - As of 12/31/2020: [Input box] - As of 12/31/2021: [Input box]---### PART C - DOUBLE-DECLINING BALANCE DEPRECIATION**Income Statement**- **Depreciation Expense** - Year Ended 12/31/2020: [Input box] - Year Ended 12/31/2021: [Input box]**Balance Sheet**- **Accumulated Depreciation** - As of 12/31/2020: [Input box] - As of 12/31/2021: [Input box]

Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called…

Speed, Inc., is a shipping company. On 1/1/20, the company purchases a new commercial sleeper truck for $740,000 cash. The expected residual value of the truck is $70,000 and the expected useful life is 8 years. The company estimates that the truck will be used to drive 1,000,000 miles over its useful life (150,000 miles in 2020; 110,000 miles in 2021 & all subsquent years). For the units-of-activity method, round the depreciaiton-per-unit to two decimal places before using it. You PART A - STRAIGHT LINE DEPRECIATION Income Statement Depreciation Expense Year Ended 12/31/2020 Year Ended 12/31/2021 Balance Sheet Accumulated Depreciation As of 12/31/2020 As of 12/31/2021 PART B - UNITS-OF-ACTIVITY DEPRECIATION Income Statement Depreciation Expense Year Ended 12/31/2020 Year Ended 12/31/2021 Balance Sheet Accumulated Depreciation As of 12/31/2020 As of 12/31/2021 PART C - DOUBLE-DECLINING BALANCE DEPRECIATION Income Statement Depreciation Expense Year Ended 12/31/2020 Year Ended 12/31/2021 Balance Sheet Accumulated Depreciation As of 12/31/2020 As of 12/31/2021

Speed, Inc., is a shipping company. On 1/1/20, the company purchases a new commercial sleeper truck for $740,000 cash. The expected residual value of the truck is $70,000 and the expected useful life is 8 years. The company estimates that the truck will be used to drive 1,000,000 miles over its useful life (150,000 miles in 2020; 110,000 miles in 2021 & all subsquent years). For the units-of-activity method, round the depreciaiton-per-unit to two decimal places before using it. You PART A - STRAIGHT LINE DEPRECIATION Income Statement Depreciation Expense Year Ended 12/31/2020 Year Ended 12/31/2021 Balance Sheet Accumulated Depreciation As of 12/31/2020 As of 12/31/2021 PART B - UNITS-OF-ACTIVITY DEPRECIATION Income Statement Depreciation Expense Year Ended 12/31/2020 Year Ended 12/31/2021 Balance Sheet Accumulated Depreciation As of 12/31/2020 As of 12/31/2021 PART C - DOUBLE-DECLINING BALANCE DEPRECIATION Income Statement Depreciation Expense Year Ended 12/31/2020 Year Ended 12/31/2021 Balance Sheet Accumulated Depreciation As of 12/31/2020 As of 12/31/2021

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

**Depreciation Methods for Educational Purposes**

*Scenario Description:*

Speed, Inc. is a shipping company. On 1/1/2020, the company purchases a new commercial sleeper truck for $740,000 cash. The expected residual value of the truck is $70,000 and the expected useful life is 8 years. The company estimates that the truck will be used to drive 1,000,000 miles over its useful life (150,000 miles in 2020; 110,000 miles in 2021 & all subsequent years).

For the units-of-activity method, round the depreciation-per-unit to two decimal places before using it.

---

### PART A - STRAIGHT LINE DEPRECIATION

**Income Statement**
- **Depreciation Expense**
- Year Ended 12/31/2020: [Input box]
- Year Ended 12/31/2021: [Input box]

**Balance Sheet**
- **Accumulated Depreciation**
- As of 12/31/2020: [Input box]
- As of 12/31/2021: [Input box]

---

### PART B - UNITS-OF-ACTIVITY DEPRECIATION

**Income Statement**
- **Depreciation Expense**
- Year Ended 12/31/2020: [Input box]
- Year Ended 12/31/2021: [Input box]

**Balance Sheet**
- **Accumulated Depreciation**
- As of 12/31/2020: [Input box]
- As of 12/31/2021: [Input box]

---

### PART C - DOUBLE-DECLINING BALANCE DEPRECIATION

**Income Statement**
- **Depreciation Expense**
- Year Ended 12/31/2020: [Input box]
- Year Ended 12/31/2021: [Input box]

**Balance Sheet**
- **Accumulated Depreciation**
- As of 12/31/2020: [Input box]
- As of 12/31/2021: [Input box]

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