Question

On January 3, 2018, Swifty Delivery Service purchased a truck at a cost of $80,000. Before placing the truck in service, Swifty spent $2,200 painting it, $1,200 replacing tires, and $8,600 overhauling the engine. The truck should remain in service for five years and have a residual value of $8,000. The truck's annual mileage is expected to be 30,000 miles in each of the first four years and 20,000 miles in the fifth year—140,000 miles in total. In deciding which depreciation method to use, Carl Thomas, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements. Requirement 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Begin by preparing a depreciation schedule using the straight-line method. Straight-Line Depreciation Schedule Depreciation for the Year Asset Useful Depreciation Accumulated Book Depreciable Cost Date Cost Life Expense Depreciation Value 92,000 $ $ 5 years = $ $ 1-3-2018 $ 12-31-2018 12-31-2019 12-31-2020 12-31-2021 84,000 1 84,000, 84,000 1 84,000 84,000, 5 years 5 years 5 years 5 years 16,800 16,800 16,800 16,800 16,800 16,800 33,600 50,400 67,200 84,000 92,000 75,200 58,400 41,600 24,800 8,000 12-31-2022 Before completing the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation expense per unit. (Round depreciation expense per unit to two decimal places.)

Answer 1

Double Declining balance
Date	Cost of asset	Book Value	DDB Rate	Depreciation expenses	Accumulated Depreciation	Book value
03-Jan-18	$92,000	$92,000	40.00%	$36,800	$36,800	$55,200
31-Dec-18	$92,000	$55,200	40.00%	$22,080	$58,880	$33,120
31-Dec-19	$92,000	$33,120	40.00%	$13,248	$72,128	$19,872
31-Dec-20	$92,000	$19,872	40.00%	$7,949	$80,077	$11,923
31-Dec-21	$92,000	$11,923	40.00%	$3,923	$84,000	$8,000
31-Dec-22	$92,000	$8,000	40.00%	$0	$84,000	$8,000