Charm

Company purchased a new car for use in its business on January 1,

2017.

It paid

$25,000

for the car.

Charm

expects the car to have a useful life of four years with an estimated residual value of zero.

Charm

expects to drive the car

20,000

miles during

2017,

85,000

miles during

2018,

75,000

miles in

2019,

and

70,000

miles in

2020,

for total expected miles of

250,000.

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Part 2

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Part 1

	Units-of-production method
	Annual
	Depreciation		Accumulated
Year	Expense		Depreciation		Book Value
Start
2017
2018
2019
2020

Requirements

Dialog content starts

Using the units-of-production method of depreciation (with miles as the production unit), calculate the following amounts for the car for each of the four years of its expected life (do not round here; use three decimal places for the depreciation cost per mile)

a.	Depreciation expense
b.	Accumulated depreciation balance
c.	Book value