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Big City Pizza bought a used Toyota delivery van on January 2,2016, for $21,000. The van was expected to remain in service for four years
Big City Pizza bought a used Toyota delivery van on January 2,2016, for $21,000. The van was expected to remain in service for four years (47,500 mailes) At the end of ts useful ife, Big City officials estimated that the van's residual value would be $2,000. The van traveled 15,000 miles the first year, 10,000 miles the second year, 12,500 miles the third year, and 10,000 miles in the fourth year 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods 2. Which method best tracks the wear and tear on the van? Which method would Big City prefer to use for income tax purposes? Explain in detal why Big City would prefor this method of depreciation expense per year for the van under the three depreciation methods.(For decimal places after each step of the calculation. For years with $O depreciation, make sure to enter "O* in the and appropriate column.) Units-of Double-Declining Straight-Line Production 2016 $ 2017 2018 2019- 47 4000 Total s 4,750 S 4,750 4.750 -4.000 5,000 19000 $ 19,000
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