Assume you have a ower shop and you bought a delivery van for $34,000 You expect the van to remain in service for three years (138.000 km) At the end of its useful life. you estimate that the van's residual value Will be 5880. You estimate the van will travel 36,000 km the first year, 56,000 km the second year, and 46,000 km the third year. Prepare an estimate otthe deprecrafion 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? Begin by ca culating straightline depreciation expense tor each year (Round the amounts for depreciation expense to the nearest whole dollar.) j I : Deprecration expense _ ) f : _ g ,r : _ ) f : Year 1 Year 2 Year 3 ( t t ( Next show your computations for uni s-of-produotion depreCiation expense for each year. (Round intermediate calculations to two decimal places. Round the amounts for depreciation expense to the nearest whole dollar. For years with $0 depreciation, make sure to enter "0" in the appropriate column.) x : Deprecration expense Year 1 x : Year 2 x = Year 3 x = Then Show your computations for doubleidiminishingebalance method of depreciation (Round intermediate calculations to two decimal places. Round the amounts for depreciation expense to the nearest whole dollar. For years with $0 depreciation, make sure to enter "0" in the appropriate column.) x : Deprecration expense Year 1 x = Year 2 x : Year '2 On April 30, 2020, Windy Mountain Party Planners (WMPP) had a $38000 balance in Accounts Receivable and a $3100 credit balance in Allowance for Uncollectible Accounts During May WMPP made credit sales of 3573.000. May collections on account were $58000. writeioffs of uncollectible receivables totalled $2,600. and an account of $1.400 was recovered Bad debt expense is estimated to be $6,570 Requirements 1. Determining bad debt expense by uSing the allowance method is management's estimate of uncollectible accounts and not an accurate measurement Why not wait until a company finds out which customers can't pay and write the accounts receivable off as they occur? 2. If the allowance method is not used to estimate uncollectible accounts. what effect would this have on accounts receivable (balance sheet) and bad debt expense (income statement)? Requirement 1. Determining ad debt expense by using he allowance method is management's estimate of uncollectible accounts and not an accurate measurement. Why not wait until a company finds out which customers can't pay and write the accounts receiva |e off as they occur? By using the allowance method. the V account is reported at the amount the company expects to collect. which is the most relevant and faithful representation of V as of the balance sheet date Also, V are properly recognized in the period in which they were V that is in the same period in which the related sales took place Requirement 2. lfthe allowance method is not used to estimate uncollectible accounts, what effect would this have on accounts receivable (balance sheet) and bad debt expense {income statement)? (Leave any unused cells blank] Calculate the company's alance of accounts receivable by entering the beginning balance and the adiusting entries in the following T-account Post the beginning balance first and then post the adjustments Accounts Receivable Beg Bal 33000 CreditSales 3100 End Bal What balance ofaccounts receivable does WMPP repor'? S What amount of bad debt expense would e reported? $