City Taxi purchases a new taxi cab for $25,000. The cab has an estimated salvage value of

Question:

City Taxi purchases a new taxi cab for $25,000. The cab has an estimated of $1,000 and is expected to be driven for approximately 120,000 miles over its useful life of five years.
Required
a. Calculate the depreciation expense per mile.
b. Prepare a deprecation schedule assuming that the actual miles driven for years one through five were as follows: 25,000; 27,000; 21,000; 28,000; and 19,000. Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...