Question

0,00V 33,266 3. Conceptual Connection: If Quick-as-Lightning used an 8 year useful life or 100,000 miles and a residual value of $1,000, what would be: (a) Depreciation expense. (Do not round intermediate calculations. Round your answers to the nearest whole dollar) a. Straight-line method: $ 4,875 2019 2020 b. Double-declining-balance method $ 10,000 7,500 C. Units-of-production method 3,900 x 3,198 x (b) Book value. Round your answers to the nearest whole dollar. 2019 2020 a. Straight-line method 35,125 $ 30,250 22,500 b. Double-declining-balance method 30,000 36,100 $ $ C. Units-of-production method X 32,902 X Foodbach I Chook My Work book 1a. Straight-line depreciation allocates the depreciable cost over the useful life of the asset. 1b. Double-declining balance is an accelerated method of depreciation in which depreciation expense equals twice the straight line rate multiple times the 1c. Under the units-of-production method: Depreciation expense is the depreciation cost per unit multiplied times the actual usage of the asset 2. Book value - Cost - Accumulated Depreciation 3. Calculate depreciation based on revised estimates and compare to the previously computed amounts

Answer 1

Correct Answer:

Requirement 1:

Units of production Depreciation expenses

Year	Depreciation expense
2019	$            5,850.00
2020	$            4,797.00

Working:

( Unit of Production )
A	Cost	$            40,000.00
B	Residual Value	$              1,000.00
C=A - B	depreciable base	$            39,000.00
D	Usage (miles)	100,000.00
E	Depreciation per miles	$                       0.39

Year	Book Value	Usage (miles)	Depreciation expense (0.39* usage per year)	Ending Book Value (book value – Depreciation expense)
2019	$       40,000.00	15000	$            5,850.00	$       34,150.00
2020	$       34,150.00	12300	$            4,797.00	$       29,353.00

Requirement 2:

Year	Ending Book Value
2019	$       34,150.00
2020	$       29,353.00

End of answer.

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