Roswell Company has the following information on one of its vehicles purchased on January 1,
Roswell Company has the following information on one of its vehicles purchased on January 1,
Year 1:
Vehicle cost $50,000
Useful life, years, estimated 5
Useful life, miles, estimated 100.000
Salvage value, estimated $10,000
Actual miles driven: Year 1 30,000
Year 2 20,000
Year 3 15,000
Year 4 25,000
Year 5 12.000
No estimates were changed during the life of the asset.
The Year 3 depreciation expense for Roswell's vehicle using the sum-of-the-years'-digits (SYD) method was
A. $6,000 B. $8,000 C. $10,000 D. $16,000
Using the activity method, what was Roswell's Year 5 depreciation expense?
A. $4,000 B. $4,800 C. $5,000 D. $6.000
Homework Answers
14) Sum of the year digit = 5+4+3+2+1 = 15
Depreciation expense = (50000-10000)*3/15 = 8000
So answer is b) $8000
15) Accumulated Depreciation expense = (50000-10000)*90000/100000 = 36000
Year 5 Depreciation expense = 40000-36000 = 4000
So answer is a) $4000
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Roswell Company has the following information on one of its vehicles purchased on January 1,
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