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D. Long-Term Assets If Lidia is able to obtain the new loan, she is looking to purchase a company cargo van to help haul the
D. Long-Term Assets If Lidia is able to obtain the new loan, she is looking to purchase a company cargo van to help haul the merchandise inventory, as well as purchase her own container machine (a machine that makes containers so she can save on her own purchase cost). She has found the cargo van she wants to purchase, as well as the machine she'd like to buy, but wants to look ahead at which depreciation methods she should use that will help maximize the use of each, as well as increase the income after depreciation. Utilizing the information below, calculate the depreciation expense for the first two years using all three main depreciation methods (Straight-Line, Units of Production, and Double-Declining-Balance) for both the cargo van and the machine. Be sure to show your calculations. Round all dollar amounts to the nearest cent. Cargo Van Price Salvage value Useful life Total miles Yr 1 miles Yr 2 miles $26,000 $2,000 10 years 90,000 12,100 9,400 Machine Price Salvage value Useful life Total hours Yr 1 hours Yr 2 hours $48,000 $3,000 8 years 13,000 1,250 1,460
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