Question

[The following information applies to the questions displayed below] Three different companies each purchased trucks on January 1, 2018, for $76,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $6,000. All three trucks were driven 81,000 miles in 2018, 55,000 miles in 2019, 46,000 miles in 2020, and 71,000 miles in 2021. Each of the three companies earned $65,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes c-1. Calculate the book value on the December 31, 2020, balance sheet? (Round "Per Unit Cost" to 3 decimal places.) Book Value CompanyA Company B Company

Answer 1

	Book Value
Company A	$ 23,500.00
Company B	$    9,500.00
Company C	$ 25,040.00

Company A
Straight Line Depreciation
	Depreciable Balance	Depreciation	Closing Balance
Dec,31,2018	$                    70,000.00	$                                   17,500.00	$         58,500.00
Dec,31,2019	$                    58,500.00	$                                   17,500.00	$         41,000.00
Dec,31,2020	$                    41,000.00	$                                   17,500.00	$         23,500.00
Company B
Double Declining Balance Depreciation
	Depreciable Balance	Depreciation 50%	Closing Balance
Dec,31,2018	$                    76,000.00	$                                   38,000.00	$         38,000.00
Dec,31,2019	$                    38,000.00	$                                   19,000.00	$         19,000.00
Dec,31,2020	$                    19,000.00	$                                     9,500.00	$            9,500.00
Company C
Units of Production Depreciation
	Depreciable Balance	Depreciation 0.28 per Miles	Closing Balance
Dec,31,2018	$                    70,000.00	$                                   22,680.00	$         53,320.00
Dec,31,2019	$                    53,320.00	$                                   15,400.00	$         37,920.00
Dec,31,2020	$                    37,920.00	$                                   12,880.00	$         25,040.00