Question

Required information [The following information applies to the questions displayed below.] On January 1, 2021, the Excel Delivery Company purchased a delivery van for $129,000. At the end of its five-year service life, it is estimated that the van will be worth $13,200. During the five-year period, the company expects to drive the van 386,000 miles. Required: Calculate annual depreciation for the five-year life of the van using each of the following methods. 2. Double-declining balance. (Round your answers to the nearest whole dollar amount.) Depreciation Year 2021 2022 2023 2024 2025 $ 0 Total

Answer 1

Solution 2:

Depreciation Schedule - Double Declining Balance Method
Year	Opening carrying Amount	Depreciation expense (Rate 40%)	Accumulated Depreciation	Carrying Amount
				1,29,000
2021	$1,29,000	$51,600	51,600	77,400
2022	$77,400	$30,960	82,560	46,440
2023	$46,440	$18,576	1,01,136	27,864
2024	$27,864	$11,146	1,12,282	16,718
2025 (Balance)	$16,718	$3,518	1,15,800	13,200
Total		$1,15,800

Solution 3:

Depreciation expense per mile = ($129000 - 13200) / 386000 = $0.30 per mile

Year	Miles	Depreciation Expense (Miles *0.30)
2021	56000	$16,800.00
2022	60000	$18,000.00
2023	47000	$14,100.00
2024	36000	$10,800.00
2025	32000	$9,600.00
Total		$69,300.00