Homework Answers
Straight line Depreciation = (Original Value - Salvage Value) /
Useful Life
= ($74700-5100)/5 = $13920
| Date | Asset Cost | Depreciable Cost | Useful Life | Depreciation Expense | Acc Dep | Book Value |
| 01-01-2018 | $ 74,700 | $ 74,700 | ||||
| 12-31-2018 | $ 69,600 | 5 | $ 13,920 | $ 13,920 | $ 60,780 | |
| 12-31-2019 | $ 55,680 | 4 | $ 13,920 | $ 27,840 | $ 46,860 | |
| 12-31-2020 | $ 41,760 | 3 | $ 13,920 | $ 41,760 | $ 32,940 | |
| 12-31-2021 | $ 27,840 | 2 | $ 13,920 | $ 55,680 | $ 19,020 | |
| 12-31-2022 | $ 13,920 | 1 | $ 13,920 | $ 69,600 | $ 5,100 |
Unit of Production Method =(Original Value - Salvage Value) /
Total Capacity
= ($ 74700-5100)/92800 = $0.75 per mile
| Date | Asset Cost | Depreciation per unit | Number of Units | Depreciation Expense | Acc Dep | Book Value |
| 01-01-2018 | $ 74,700 | $ 74,700 | ||||
| 12-31-2018 | $ 0.75 | 20000 | $ 15,000 | $ 15,000 | $ 59,700 | |
| 12-31-2019 | $ 0.75 | 20000 | $ 15,000 | $ 30,000 | $ 44,700 | |
| 12-31-2020 | $ 0.75 | 20000 | $ 15,000 | $ 45,000 | $ 29,700 | |
| 12-31-2021 | $ 0.75 | 20000 | $ 15,000 | $ 60,000 | $ 14,700 | |
| 12-31-2022 | $ 0.75 | 12800 | $ 9,600 | $ 69,600 | $ 5,100 |
Double Declining Balance method = Beginning Balance x 2 times straight line rate
| Date | Asset Cost | Book Value | DDB Rate | Depreciation Expense | Acc Dep | Book Value |
| 01-01-2018 | $ 74,700 | $ 74,700 | ||||
| 12-31-2018 | $ 74,700 | 40% | $ 29,880 | $ 29,880 | $ 44,820 | |
| 12-31-2019 | $ 44,820 | 40% | $ 17,928 | $ 47,808 | $ 26,892 | |
| 12-31-2020 | $ 26,892 | 40% | $ 10,757 | $ 58,565 | $ 16,135 | |
| 12-31-2021 | $ 16,135 | 40% | $ 6,454 | $ 65,019 | $ 9,681 | |
| 12-31-2022 | $ 9,681 | 40% | $ 3,872 | $ 68,891 | $ 5,809 |
2.
Staright line Depreciation should be used as it gives lowest
depreciation for 1st year, hence highest net income
Add Answer to:
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Chapter 10
On January 2, 2013, Speedway Delivery Service purchased a truck at a cost of $75,000. Before placing the truck in service, Speedacy spent S4, co painting i. $1,200 replacing tires, and $7.000 overhauling the engine. The truck should remain in service for five years and have a residual value of S10,000 The truck's annual miicago is expected to be 27.000 milies in each of the first four years and 12,000 mics in the ninth year 120.000 miles instal....
On January 3, 2018, On Time Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, On Time spent $4,000 painting it, $1,700 replacing tires, and $2,000 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,100. The truck's annual mileage is expected to be 20,000 miles in each of the first four years and 12,800 miles in the fifth year 92,800 miles in total....
On January 1, 2018, Brisk Delivery Service purchased a truck at a cost of $75,000. Before placing the truck in service, Brisk spent $3,000 painting it. $1,200 replacing tires, and $8,800 overhauling the engine. The truck should remain in service for five years and have a residual value of $10,000. The truck's annual mileage is expected to be 27,000 miles in each of the first four years and 12,000 miles in the fifth year-120,000 miles in total. In deciding which...
On January 2, 2018, Reliable Delivery Service purchased a truck at a cost of $95,000. Before placing the truck in service, Reliable spent $2,500 painting it, $800 replacing tires, and $10,700 overhauling the engine. The truck should remain in service for five years and have a residual value of $10,000. The truck's annual mileage is expected to be 26,000 miles in each of the first four years and 19,750 miles in the fifth year-123,750 miles in total. In deciding which...
On January 2, 2018, Quick Delivery Service purchased a truck at a cost of $90,000. Before placing the truck in service, Quick spent $2,200 painting it, $1,700 replacing tires, and $5,100 overhauling the engine. The truck should remain in service for five years and have a residual value of $9,000. The truck's annual mileage is expected to be 21,000 miles in each of the first four years and 16,000 miles in the fifth year—100,000 miles in total. In deciding which...
On January 2, 2018, Reliable Delivery Service purchased a truck at a cost of $65,000. Before placing the truck in service, Reliable spent $2,200 painting it, $1,700 replacing tires, and $10,600 overhauling the engine. The truck should remain in service for five years and have a residual value of $6,000. The truck's annual mileage is expected to be 23,000 miles in each of the first four years and 13,000 miles in the fifth year—105,000 miles in total. In deciding which...
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