Question
depreciation for Partial Periods Norman Delivery Company purchased a new delivery truck on April 1, 2019. Norman computes depreciation expense to the nearest whole month.
depreciation for Partial Periods
Norman Delivery Company purchased a new delivery truck on April 1, 2019. Norman computes depreciation expense to the nearest whole month.
DATA
Truck purchasing cost$37,000Truck's expected service life, years5Truck's expected service life, miles 170,000
Truck's residual value $3,000
Miles driven in 201910,000
Miles driven in 202016,000
REQUIRED:
1.Compute depreciation expense for 2019 and 2020 using the following methods:
a.Straight-line method
b.Sum-of-the-years'-digits method
c.Double-declining-balance method
d. Activity method
2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020?
Using formulas and data from the problem above, perform the required analysis.
1. Depreciation /Formulas
a.Straight-line method:
2019
2020
b.Sum-of-the-years'-digits method2019
2020
c. Double-declining-balance method2019
2020
d.Activity method
2019
2020
2 . Book Value/formulas
a.Straight-line method:
2019
2020
b.Sum-of-the-years'-digits method2019
2020
c.Double-declining-balance method2019
2020
d.Activity method
2019
2020
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
10th edition
1260481956, 1260310175, 978-1260481952
