Depreciation for Partial Periods

Cheers Delivery Company purchased a new delivery truck for $39,000 on April 1, 2016. The truck is expected to have a service life of 10 years or 139,200 miles and a residual value of $5,400. The truck was driven 8,300 miles in 2016 and 11,400 miles in 2017. Cheers computes depreciation to the nearest whole month.

Required:

1. Compute depreciation expense for 2016 and 2017 using the following methods: (Round your final answers to the nearest dollar.)
   1. Straight-line method

      2016	$ fill in the blank 1
      2017	$ fill in the blank 2

   2. Sum-of-the-years'-digits method

      2016	$ fill in the blank 3
      2017	$ fill in the blank 4

   3. Double-declining-balance method

      2016	$ fill in the blank 5
      2017	$ fill in the blank 6

   4. Activity method

      2016	$ fill in the blank 7
      2017	$ fill in the blank 8

2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017? (Round your answers to the nearest dollar.)
   1. Straight-line method

      2016	$ fill in the blank 9
      2017	$ fill in the blank 10

   2. Sum-of-the-years'-digits method

      2016	$ fill in the blank 11
      2017	$ fill in the blank 12

   3. Double-declining-balance method

      2016	$ fill in the blank 13
      2017	$ fill in the blank 14

   4. Activity method

      2016	$ fill in the blank 15
      2017	$ fill in the blank 16

3. The book value of the asset in the early years of the asset's service will be
   about the samehigherlower
   under an accelerated method as compared to the straight-line method. The
   activitydouble-declining balancestraight-linesum-of-the-years-digits
   method is appropriate when the service life of the asset is affected primarily by the amount the asset is used