Question
Assume you have a flower shop and you bought a delivery van for $34,000 . You expect the van to remain in service for three
Assume you have a flower shop and you bought a delivery van for $34,000 . You expect the van to remain in service for three years 144,000km . At the end of its useful life, you estimate that the van's residual value will be $2320 . You estimate the van will travel 38,000 km the first year, 58,000 km the second year, and 48,000 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? How does management determine which depreciation method to use?
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