Determining asset cost, preparing depreciation schedules (3 methods), and identifying depreciation results that meet management objectives On January 3, 2018, Rapid Delivery Service purchased a truck at a cost of $100,000. Before placing the truck in service, Rapid spent $3,000 painting it. $600 replacing tires, and $10,400 overhauling the engine. The truck should remain in service for five years and have a residual value of $12,000. The truck's annual mileage is expected to be 32,000 miles in each of the first four years and 8,000 miles in the fifth year136,000 journal entry to miles in total. In deciding which depreciation method to use. Andy Sargeant, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double- declining-balance). Requirements 1. Prepare a depreciation schedule for each depreciation method showing depreciation expense, accumulated depreciation, and asset book value. 2. Rapid prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. Consider the first two years that Rapid uses the truck. Identify the depreciation method that meets the company's objectives. 3. Assume that the company sold the truck for $45,000 at end of the third year (12/31/20). The company used the double declining balance method of depreciation. a) Compute the gain or loss on sale b) Prepare the journal entry to record the sale transaction