Question
1. Urban Pizza bought a used Ford delivery van on January 2, 2018, for $ 23000. The van was expected to remain in service for
1. Urban Pizza bought a used Ford delivery van on January 2, 2018, for $ 23000. The van was expected to remain in service for four years left parenthesis 102000 miles). At the end of its useful life, Urban management estimated that the van's residual value would be $ 2600. The van traveled 40000 miles the first year, 33000 miles the second year, 18000 miles the third year, and 11000 miles in the fourth year.
Instructions:
Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. (For units-of-production and double-declining-balance methods, round to the nearest two decimal places after each step of the calculation.)
Which method best tracks the wear and tear on the van?
Which method would Urban prefer to use for income tax purposes? Explain your reasoning in detail.
2. Barn Sales Company completed the following note payable transactions:
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1.How much interest expense must be accrued at December 31, 2018? (Round your answer to the nearest whole dollar.)
2.Determine the amount of Barn Sales' final payment on July 1, 2019.
3.How much interest expense will Barn Sales report for 2018 and for 2019? (If needed, round your answer to the nearest whole dollar.)
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