Question

Chapter 9 Exercise Naldo Party Supplies Inc. purchased a truck for 28.000 its useful life is 3 years/140,000 miles. The salvage value has been determined to be 4.500. Prepare the depreciation schedules using all 3 methods. Note that in the first year, the truck drove 67,000 miles, 35.000 miles during the second, and 38,000 during the third Straight Line Book Value Year Depreciation Expense Accumulated Depreciation First Year Second Year Third Year Double Declining Rate Book Value Year Depreciation Expense Accumulated Depreciation First Year Second Year Third Year Units of Activity Book Value Year Depreciation Expense Accumulated Depreciation First Year Second Year Third Year

Answer 1

Cost of Asset 28000 Residual Value 4500 Useful Life Depreciable Asset = Cost - Residual value Depreciable Asset 23500 Depreciation p.a = Depreciable asset / Useful Life Depreciation p.a = 7833 Cost of Asset 28000 Residual Value 4500 Total production/hours 140000 Depreciable Asset = Cost - Residual value Depreciable Asset 23500 Depreciation p.u= Depreciable asset / Production units / hours Depreciation p.u = 0.17 Year Year Straight line Method Depreciation Accumulated expenses Depreciaton Book value 7,833 $ 7,833$ 20,167 7,833 $ 15,667 $ 12,333 7,833 $ 23,500 $ 4,500 $ 23,500 $ 23,500 $ 4,500 Units of Output / Activity Units or Depreciable Depreciation Depreciation Accumulated Hours units Per unit expenses Depreciaton 67000 67000 $ 0.17$ 11,246 $ 11,246 35000 35000 $ 0.17 $ 5,875 $ 17,121 38000 38000 0.17 $ 6,379 $ 23,500 140000 140000 $ 0.17 $ 23,500 $ 23,500 Book value $ 16,754 $ 10,879 $ 4,500 $ 4,500 Total Total

Depreciation rate = ( 1*200 /useful life ) = 67% Double Decline Method Year Book value at Accumulate Beginning of the Depreciation Depreciation year rate expenses Depreciaton Book value 28,000 66.67% $ 18,667 $ 18,667 | $ 9,333 9,333 51.78% $ 4,833 $ 23,500 $ 4,500 4,500 $ 23,500 $ 4,500 $ 23,500 $ 23,500 $ 4,500 Total