1. Montello Inc. purchases a delivery truck for $12,300. The truck has a salvage value of $2,700 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.

$_________

2. Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.

$_________