Question

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.

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 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. 1. Straight line 2. Sum-of-the-years'-digits. 3. Double-declining balancee 4. Units of production using miles driven as a measure of output, and the following actual mileage Complete this question by entering your answers in the tabs below Required Required 2 Required 3 Required 4 Calculate annual depreciation for the five-year life of the van using units of production using miles driven as a measure of output, and the following actual mileage. (Do not round your intermediate calculations.) Year 2018 2019 2020 2021 2022 Total Miles Depreciatio 22,000 24,000 15,000 20,000 21,000

Answer 1

1
Straight line depreciation per year = (33000-3000)/5= $6000
2
Sum-of-the-years-digits = 5*(5+1)/2= 15
Year	Depreciation
2018	10000		=(33000-3000)/15*5
2019	8000		=(33000-3000)/15*4
2020	6000		=(33000-3000)/15*3
2021	4000		=(33000-3000)/15*2
2022	2000		=(33000-3000)/15*1
3
Double declining rate =(1/5)*2 = 40%
Year	Beginning book value	Rate	Depreciation expense	Accumulated depreciation	Ending book value
2018	33000	40%	13200	13200	19800
2019	19800	40%	7920	21120	11880
2020	11880	40%	4752	25872	7128
2021	7128	40%	2851	28723	4277
2022	4277	40%	1277	30000	3000
4
Depreciation rate per mile = (33000-3000)/100000= $0.30
Year	Miles	Depreciation
2018	22000	6600	(22000*0.30)
2019	24000	7200	(24000*0.30)
2020	15000	4500	(15000*0.30)
2021	20000	6000	(20000*0.30)
2022	21000	5700	=30000-(6600+7200+4500+6000)
Total		30000