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. Required: Calculate annual depreciation for the first two years using each of the following methods. Round all amounts to the nearest dollar. 1. Straight-line. 2. Double-declining-balance. 3. Activity-based. Actual miles driven each year were 40,000 miles in year 1 and 46,000 miles in year 2.
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. Required: Calculate annual depreciation for the first two years using each of the following methods. Round all amounts to the nearest dollar. 1. Straight-line. 2. Double-declining-balance. 3. Activity-based. Actual miles driven each year were 40,000 miles in year 1 and 46,000 miles in year 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Required:
Calculate annual
Round all amounts to the nearest dollar.
1. Straight-line.
2. Double-declining-balance.
3. Activity-based.
Actual miles driven each year were 40,000 miles in year 1 and 46,000 miles in year 2.
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