Question
1. An asset was purchased for $110,000 on January 1, Year 1, and was originally estimated to have a useful life of 10 years with
1. An asset was purchased for $110,000 on January 1, Year 1, and was originally estimated to have a useful life of 10 years with a residual value of $10,000. At the end of the third year, it was determined that the asset would be sold. Calculate the net book value at the end of year three using the straight-line method.
2. A delivery truck was purchased for $120,000 on January 1. It was estimated to have a useful life of 10 years and 200,000 miles with a residual value of $10,000. During the first year, the truck was driven 18,700 miles. Calculate the depreciation expense for the first year, assuming the company uses the units-of-production method.
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