Assume you have a flower shop and you bought a delivery van for

$36,000. You expect the van to remain in service for three years (129,000 km). At the end of its useful life, you estimate that the van's residual value will be $1,170. You estimate the van will travel 33,000km the first year 53,000 km the second year, and43,000 km the third year. Prepare an estimate of the depreciation expense per year for the van under the three depreciation methods. Show your computations.

Which method do you think tracks the useful life cost on the van most closely?

Begin by calculating straight-line depreciation expense for each year.

	(	Cost		Residual value	)	/	Useful life, in years	=	Depreciation expense
Year 1	(				)	/		=
Year 2	(				)	/		=
Year 3	(				)	/		=

Next show your computations for units-of-production depreciation expense for each year. (Round intermediate calculations to two decimal places. For years with $0 depreciation, make sure to enter "0" in the appropriate column.)

Depreciation per unit

x

Kilometres travelled

=

Depreciation expense

Year 1

x

=

Year 2

x

=

Year 3

x

=

Then show your computations for double-diminishing-balance method of depreciation. (Round intermediate calculations to two decimal places. For years with $0 depreciation, make sure to enter "0" in the appropriate column.)

	Carrying amount	x	DDB rate	=	Depreciation expense
Year 1		x		=
Year 2		x		=
Year 3