Depreciation for Partial Periods

Norman Delivery Company purchased a new delivery truck for $$54,000$ on April $1,$ Year $1.$ The truck is expected to have a service life of $10$ years or $120,000$ miles and a residual value of $$3,000.$ The truck was driven $8,000$ miles in Year $1$ and $14,000$ miles in Year $2.$ Norman computes depreciation expense to the nearest whole month.

Required:

Compute depreciation expense for Year $1$ and Year $2$ using the following methods: $($Round your answers to the nearest dollar.$)$

Straight$-$line method

Year $1$ $fill in the blank $1$

Year $2$ $fill in the blank $2$

Sum$-$of$-$the$-$years'$-$digits method

Year $1$ $fill in the blank $3$

Year $2$ $fill in the blank $4$

Double$-$declining$-$balance method

Year $1$ $fill in the blank $5$

Year $2$ $fill in the blank $6$

Activity method

Year $1$ $fill in the blank $7$

Year $2$ $fill in the blank $8$

For each method, what is the book value of the machine at the end of Year $1?$ At the end of Year $2?($Round your answers to the nearest dollar.$)$

Straight$-$line method

Year $1$ $fill in the blank $9$

Year $2$ $fill in the blank $10$

Sum$-$of$-$the$-$years'$-$digits method

Year $1$ $fill in the blank $11$

Year $2$ $fill in the blank $12$

Double$-$declining$-$balance method

Year $1$ $fill in the blank $13$

Year $2$ $fill in the blank $14$

Activity method

Year $1$ $fill in the blank $15$

Year $2$ $fill in the blank $16$

Next Level The book value of the asset in the early years of the asset's service will be

lower

under an accelerated method as compared to the straight$-$line method. The

activity

method is appropriate when the service life of the asset is affected primarily by the amount the asset is used.

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