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Depreciation by Units-of-Activity Depreciation A diesel-powered tractor with a cost of $136,700 and estimated residual value of $14,500 is expected to have a useful operating life of 18,800 hours. During November, the tractor was operated 160 hours. Determine the depreciation for the month. Carry out any division to two decimal places. $ Capital and Revenue Expenditures US Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service: Classify each of the costs as a capital expenditure or a revenue expenditure. Cost Classification 1. Installed GPS systems on the trucks. 2. Replaced the transmission fluid on a truck that had been in service for the past four years. 3. Overhauled the engine on one of the trucks purchased three years ago. 4. Performed annual service of installing new spark plugs, changing the oil, and greasing the joints of all trucks and vans. 5. Rebuilt the engine on one of the vans that had been driven 80,000 miles. 6. Repaired a flat tire on one of the vans. 7. Installed a hydraulic lift to a truck. 8. Tinted the back and side windows of the vans and installed a security system to discourage theft of contents. 9. Replaced a truck's suspension system with a new suspension system, allowing for heavier loads. 10. Installed an optional third-row seat on one of the vans. Depreciation by Two Methods A storage tank acquired at the beginning of the fiscal year at a cost of $85,000 has an estimated residual value of $6,000 and an estimated useful life of 20 years. a. Determine the amount of annual depreciation by the straight-line method. $ b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar. Depreciation Year 1 $ Year 2 $ )