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Can you solve Requirement 2 please: On January 1, 2018, Austin Airlines purchased a used airplane for $41,600,000. Austin Airlines expects the plane to remain
Can you solve Requirement 2 please:
On January 1, 2018, Austin Airlines purchased a used airplane for $41,600,000. Austin Airlines expects the plane to remain useful for four years (4,000,000 miles) and to have a residual value of $5,600,000. The company expects the plane to be flown 1,500,000 miles the first year. Read the requirements. Requirement 1a. Compute Austin Airlines's first-year depreciation expense on the plane using the straight-line method. Begin by selecting the formula to calculate the company's first-year depreciation expense on the plane using the straight-line method. Then enter the amounts and calculate the depreciation for the first year. Cost Residual value - Useful life = Straight-line depreciation = $ 9,000,000 41,600,000 5,600,000 4 Requirement 1b. Compute Austin Airlines's first-year depreciation expense on the plane using the units-of-production method. Before calculating the first-year depreciation expense on the plane using the units-of-production method, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation per unit. ( Cost Residual value ) + Useful life in units Depreciation per unit ( $ 41,600,000 5,600,000 ) 4,000,000 9 Now, select the formula, enter the amounts, and calculate the company's first-year depreciation expense on the plane using the units-of-production method. Current year usage Depreciation per unit Units-of-production depreciation $ 1,500,000 13,500,000 9 Requirement 1c. Compute Austin Airlines's first-year depreciation expense on the plane using the double-declining-balance method. Begin by selecting the formula to calculate the company's first-year depreciation expense on the plane using the double-declining-balance method. Then enter the amounts and calculate the depreciation expense for the first year. (Enter "0" for items with a zero value.) Cost Accumulated depreciation ) = 2 x (1 + Useful life) 2 x (1 + 4) Double-declining- balance depreciation 20,800,000 ( $ 41,600,000 0 ) Begin by selecting the formula to calculate the company's first-year depreciation expense on the plane using the double-declining-balance method. Then enter the amounts and calculate the depreciation expense for the first year. (Enter "O" for items with zero value.) Cost Accumulated depreciation ) 2 x (1 + Useful life) 2 x (1 + 4) Double-declining- balance depreciation $ 20,800,000 $ 41,600,000 $ 0 ) Requirement 2. Show the airplane's book value at the end of the first year for all three methods. Straight-Line Units-of-production Double-declining-balance Cost Less: Accumulated Depreciation Book ValueStep by Step Solution
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