Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bar Delivery Company purchased a new delivery truck for $36,000 on April 1, 2019. The truck is expected to have a service life of 5
Bar Delivery Company purchased a new delivery truck for $36,000 on April 1, 2019. The truck is expected to have a service life of 5 years or 120,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 18,000 miles in 2020. Bar computes depreciation expense to the nearest whole month.
- Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.)
- Straight-line method
2019 $ 2020 $ - Sum-of-the-years'-digits method
2019 $ 2020 $ - Double-declining-balance method
2019 $ 2020 $ - Activity method
2019 $ 2020 $
- Straight-line method
- For each method, what is the book value of the machine at the end of 2019? At the end of 2020? (Round your answers to the nearest dollar.)
- Straight-line method
2019 $ 2020 $ - Sum-of-the-years'-digits method
2019 $ 2020 $ - Double-declining-balance method
2019 $ 2020 $ - Activity method
2019 $ 2020 $
- Straight-line method
- Next Level The book value of the asset in the early years of the asset's service will be lower under an accelerated method as compared to the straight-line method. The sum-of-the-years-digits method is appropriate when the service life of the asset is affected primarily by the amount the asset is used.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started