Required information[The following information applies to the questions displayed below.]Speedy Delivery Company purchases a delivery van for $38,400. Speedy estimates that at the end of its four-year servicelife, the van will be worth $6,200. During the four-year period, the company expects to drive the van 201,250 miles.Actual miles driven each year were 52,000 miles in year 1 and 58,000 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 yourintermediate calculations.)3. Activity-based.AnnualYearDepreciation1

Under this method of charging depreciation, the depreciation is charged based on the usage during…

Answered: Speedy Delivery Company purchases a…

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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Dasher Company acquired a truck for use in its business for $25,500 in a cash transaction. The truck is expected to be used over a five-year period, will be driven approximately 18,000 miles per year, and is expected to have a value at the end of the five years of $4,500. Compute the amount of depreciation that will be taken in the first two years of the truck’s useful life if the actual miles driven are 16,000 and 18,200, respectively. Round the depreciation per mile to the nearest full cent.
George Company has the opportunity to purchase an asset that costs $40,000. The asset is expected to increase net income by $10,000 per year. Depreciation expense will be $5,000 per year. Based on this information the payback period is: A) 4 years. B) 2.5 years. C) 2.67 years. D) 8 years.
Colquhoun International purchases a warehouse for $301,000. The best estimate of the salvage value at the time of purchase was $16,000, and it is expected to be us for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determir that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. $ 171,000 B. Determine the depreciation expense for the final fifteen years of the asset's life. 11,400 X Feedback V Check My Work When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount. C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. Depreciation Expense 171,000 X Accumulated Depreciation-Warehouse 171,000
The pharmacy’s delivery van cost $12,000.00. Its estimated useful life is 10 years, and the disposal value is $1,500.00. What is the annual depreciation? (round to the nearest whole number) Group of answer choices $1,050.00 $3,000.00 $2,700.00 $11,850.00
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Montezuma Inc. purchases a delivery truck for $17,600. The truck has a salvage value of $4,000 and is expected to be driven for 8 years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $5,000. A. Determine the Depreciation Expense for the final three years of the asset's life. Round final answer to nearest whole dollar. $1 per year B. Prepare the journal entry for year four. If an amount box does not require an entry, leave it blank. Round final answer to nearest whole dollar. Accumulated Depreciation-Delivery Truck Cash Depreciation Expense Inventory Patent
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The Scampini Supplies Company recently purchased a new delivery truck. The new truck has an after-tax cost of $23,500, and it is expected to generate after-tax cash flows of $7,250 per year. The truck has a 5-year expected life. The expected year-end abandonment values (after-tax salvage values) for the truck are given below. The company's WACC is 8%. After-Tax Year 0 Annual After-Tax Cash Flow Abandonment Value ($23,500) 1 7,250 2 7,250 3 7,250 7,250 $17,500 15,000 13,000 8,000 7,250 4 5 a. What is the truck's optimal economic life? Round your answer to the nearest whole number. year(s) b. Would the introduction of abandonment values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project? -Select- v
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Purchased the machine for $15,500 with a down payment of 300. Additional costs for purchasing the machine paid for in cash by the company were a $500 machine test fee and a $500 shipping service fee. The machine can be used for 5 years with a total machine working hours of 35,000 hours. The salvage value of the machine at the end of year 5 is $1,500. At the end of year 4 the machine underwent a revision of its useful life period. The machine can still be used for 2 more years. At the end of year 5 the company decides to sell the machine for cash for $2,750. Required: calculate the cost of the machine, calculate the depreciation for the year before and after the revision, calculate the book value of the machine for year 4, calculate the profit and loss from the sale of the machine, make journals for all these transactions. Note: Include the method of processing in answering the questions and the excel formula
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An asset costs $290,000 and is classified as a ten-year asset. What is the annual depreciation expense for the first three years under the straight-line and the modified accelerated cost recovery systems of depreciation? Be sure to apply the half-year convention to straight-line depreciation. Use Exhibit 9.4 to answer the question. Round your answers to the nearest dollar. Straight-line depreciation: Year Depreciation expense 1 $ 2 $ 3 $ Accelerated cost recovery system of depreciation: Year Depreciation expense 1 $ 2 $ 3 $

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