Question

Depreciation for Partial Periods

Storm Delivery Company purchased a new delivery truck for $69,000 on April 1, 2019. The truck is expected to have a service life of 5 years or 180,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 20,000 miles in 2020. Storm computes depreciation expense to the nearest whole month.

Required:

1. Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.)
   1. Straight-line method

      2019	$ 9900
      2020	$ 13200

   2. Sum-of-the-years'-digits method

      2019	$ 16500
      2020	$

   3. Double-declining-balance method

      2019	$
      2020	$

   4. Activity method

      2019	$
      2020	$

2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020? (Round your answers to the nearest dollar.)
   1. Straight-line method

      2019	$ 59100
      2020	$ 45900

   2. Sum-of-the-years'-digits method

      2019	$ 52500
      2020	$

   3. Double-declining-balance method

      2019	$ 48300
      2020	$

   4. Activity method

      2019	$
      2020	$

3. Next Level The book value of the asset in the early years of the asset's service will be lower  under an accelerated method as compared to the straight-line method. The activity  method is appropriate when the service life of the asset is affected primarily by the amount the asset is used.

Answer 1

2) Sumof yeary Digit method calculation = Depreciation base x Remains useful life Sum of yeary Digit. 6 SULOV Sood Depreciation Base = cost Residual value 20$69,000 - 3000 = $ 66,000 SOS Raj Depre · Base . Depreciation 2 $66,000 x 5 yrs 1+2+3+4+5 the year c = $66,000 x 5yrs orto 15 til 152 Depreciation for - $22,000 the year 2019 $22,000 x 9 . for Cine a months to April to December $16.500 Jose 91 Slovo X fog year 2020 2 Orly 20 ton 15 Rey bepreciation Depreciation 2020 = 0 $66,000 x 4yrs for y r $17,600 year 2020 poe roest nota como o far )

BOOK values o f Lorra 1/4/2019 E) Deprec far geon 2014 = = $69,000 ($16,500) 2 . 6 Seo Book value 2019 11/2020 cubreg $ 52,500 (-) Depreciation for 20 ($17,600) year 2020 S Book value as on 31/12/2020 X = $34,900 ാട് വിട്ട (c) Double Decling method Life of machine = Depreciation rate = 5 yr8 root sorte I x100 useful life 690,55 = - x 100 2014/gay UN 019090 - නලයන් ලග Double Declining rate : 2x 201 932uomo 02 401 & 007 e formula = for year 2 = cast of the Asset x Double Dechy grate $69,000 x 40%. cos neogo 2012 oboro J $ 27,600 je obicorpo pepreciation (from April $27,600x9 12 four year 2019 = to December) = $ 20700

Depreciation for year 2020 . [cost of asset - year 1 Depreci ) x Donate - c $69,000 - $20,700 ) x 40%. 2.300 * 4011) hueso quo $ 19,320.jp Book values $ 69,000 (20,700) AS on 1/4/2019 (-) Depreciat for your ? 2019 s Book value 2019 $ 48,300 C$19,320) - Depreciation for year 2 2020 $ 28,980 Book value as on 2 31112 12020 103 991 wees om (d) Activity method 4 = Depreciatim Expense Cost - Salvage) x A Performed during the period Total Estimated life time activity of the Asset. - ($69,000 - 3000) x 10,000 Depreciation 180,000

Depreciation for year 2019 cie, a months Depreciation $66,000 x10,000 years 180,000 510200 Bruto. puron $ 3667. 02293) POZEL for year 2020 om 9o 200 = $ 66,000 x 20,000 180,000 visional $7333. yout 2001 S $735 ti sinone - al.. bubiap tabaqa's Depreciation Rrus luies Book values As m. 1412019 - Depreci for 2014 - - $ 69,000 C$ 3667) o ther- Book value 2019 $ 65,333 trezyną (7333) for 2020 (+) Depreci on $ 58,000 to - Timang ging BOOK value as 31/12/2020 Lamun to is TRPAS SHOS + Pups (stos - PEPS) Lovamo 70 Juin tn 9231 C4 ngopU

0 cost of delivary fruck = $69,000 Purchased a 1-4- 2019 Life = syr8 Residual value = $3000 NO Of mile is Lifetime - 180,000 2020 2019 ) No. of miles derivan - 10,000! ND of mily driven 9- 20,000 (a) straight line method Cost - Salvage value Life Depreciation = 69,000 - 3000 Depreciation per annum 2 = $13,200 In 2019: In 2020 : 19,200x = $9900 $13,200 Book values ilu/2012 - 69,000 uwep (9900) Biliz/2019 - 59,100 (-) DeP (15,200) 31/12/2020 45,900