ABC Corporation purchased a truck for $36,000. Salvage value is $6,400 and useful life is 4 years. Total expected mileage for the four years of operation will be 148,000 miles.

In a notepad, calculate annual depreciation for the first two years using each of the following methods and then answer the questions:

• Stright-line Method
• Double-declining-balance method
• Activity-based method ( actual mileage Year 1: 40,000 and Year 2: 46,000

1.)What is the Depreciation Expense for Year 1 and Year 2 respectively? Use double declining balance method

2.)Activity-based method ( actual mileage Year 1: 40,000 and Year 2: 46,000)What is the Depreciation Expense for Year 1 and Year 2 respectively?

3.) What is the Book value of the truck at the end of year 2 using the Straight-line method?

4.) What is the Book value of the truck at the end of year 2 using the Double-declining-balance?

5.) What is the Book value of the truck at the end of year 2 using the Activity-based?