Depreciation for Partial Periods

Lightning Delivery Company purchased a new delivery truck for $45,000 on April 1, 2013. The truck is expected to have a service life of 10 years or 120,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2013 and 13,000 miles in 2014. Lightning computes depreciation to the nearest whole month.

Required:

1. Compute depreciation expense for 2013 and 2014 using the (Round your answers to the nearest dollar.)

   2013	$
   2014	$

   1. Straight-line method

      2013	$
      2014	$

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

      2013	$
      2014	$

   3. Double-declining-balance method

      2013	$
      2014	$

   4. Activity method
2. For each method, what is the book value of the machine at the end of 2013? At the end of 2014? (Round your answers to the nearest dollar.)

   2013	$
   2014	$

   1. Straight-line method

      2013	$
      2014	$

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

      2013	$
      2014	$

   3. Double-declining-balance method

      2013	$
      2014	$

   4. Activity method
3. The book value of the asset in the early years of the asset's service will be - Select your answer -higherlowerabout the sameItem 17 under an accelerated method as compared to the straight-line method. The- Select your answer -sum-of-the-years-digitsdouble-declining balancestraight-lineactivityItem 18 method is appropriate when the service life of the asset is affected primarily by the amount the asset is used.