Chapter 10, Problem 6BTN

Each ream member is to become an expert on one depreciation method to facilitate teammates' understanding of that method. Follow these procedures:

1. Each team member is to select an area for expertise from one of the following depreciation methods: straight-line, units-of-production, or double-declining-balance.
2. Expert teams are to be formed from those who have selected the same area of expertise. The instructor will identify the location where each expert team meets.
3. Using the following data, expert teams are to collaborate and develop a presentation answering the requirements. Expert team members must write the presentation in a format they can show to their

learning teams.
Point: This activity can follow an overview of each method. Step I allows for three areas of expertise. Larger teams will have some duplication of areas, but the straight-line choice should not be duplicated Expert teams can use the book and consult with the instructor.

Data and Requirements On January 8,2013. Whitewater Riders purchases a van to transport rafters back to the point of departure at the conclusion of the rafting adventures they operate. The cost of the van is $44,000. It has an estimated salvage value of $2,000 and is expected to be used for four years and driven 60,000 miles. The van is driven 12,000 miles in 2013.18,000 miles in 2014,21,000 in 2015, and 10,000 in 2016.

1. Compute the annual depreciation expense for each year of the van’s estimated useful life.
2. Explain when and how annual depreciation is recorded.
3. Explain the impact on income of this depreciation method versus others over the van’s life.
4. Identify the van’s book value for each year of its life and illustrate the reporting of this amount for any one year.

Re-form original learning teams. In rotation, experts are to present to their teams the results from part c. Experts are to encourage and respond to questions.