Question

P9-31A (similar to) Question Help On January 3, 2018, Quick Delivery Service purchased a truck at a cost of S67,000. Before placing the truck in service, Quick spent $4,000 painting it, $1,500 replacing tires, and $2,200 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. In deciding which depreciation method to use, Harold Parker, 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 e Begin by preparing a depreciation schedule using the straight-line method. Straight-Line Depreciation Schedule Requirements Depreciation for the Year Useful Life 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense Asset ciable Cost Depreciation Accumulated Book ExpenseDepreciation Value accumulated depreciation, and asset book value Date Cost 2. Quick prepares financial statements using the depreciation method that reports the highest net income in the years of asset use. Consider the first year that Quick uses the truck. Identify the depreciation method that me the company's objectives 1-3-2018 12-31-2018 12-31-2019 12-31-2020 12-31-2021 Print Done

Answer 1

purchase cost of the Truck 67000 ADD: Painting Replacing Tires Overhauling the Engine Total Cost of the Truck 74700 Less: residual Value Depreciable Cost 4000 1500 2200 5100 69600