Assume that at the beginning of 2017, Porter Airlines purchased a Bombardier Q400 aircraft at a cost of $25,000,000. Porter expects the plane to remain useful for five years (5,000,000 km) and to have a residual value of $5,000,000. Porter expects the plane to be flown 750,000 km the first year and 1,250,000 km each year during years 2 through 4, and 500,000 km the last year.
1. Compute Porter's first-year depreciation on the plane using the following methods:
a. Straight-line
b. Units-of-production
c. Double-diminishing-balance
2. Show the airplane's carrying amount at the end of the first year under each depreciation method?