E10-6 De Plain International bought a delivery truck on January 2. 20X1. for $15,000. The truck was
Question:
E10-6 De Plain International bought a delivery truck on January 2. 20X1. for $15,000. The truck was expected to remain in service four years and to last 100.000 miles. At the end of its useful life. De Plain officials estimated that the truck's residual value would be $3,000. The truck traveled 34.000 miles the first year, 28.000 the second year. 18.000 the third year, and 20.000 the fourth year. Prepare a schedule of depreciation expense per year for the truck under the three depreciation methods. After two years under the double-declining-balance method. the company switched to the straight-line method. Show your computations. Which method tracks the wear and tear on the truck most closely? Which method would De Plain prefer to use for income tax purposes? Explain in detail why De Plain prefers this method.
Step by Step Answer:
Accounting
ISBN: 9780130906991
5th Edition
Authors: Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones