Chapter 11, Problem 11.1E

Depreciation methods

• LO11–2

On January 1, 2018, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles.

Required:

Calculate annual depreciation for the five-year life of the van using each of the following methods. Round all computations to the nearest dollar.

1. Straight line

2. Sum-of-the-years’-digits

3. Double-declining balance

4. Units of production using miles driven as a measure of output, and the following actual mileage:

Year	Miles
2018	22,000
2019	24,000
2020	15,000
2021	20,000
2022	21,000