E 11-1

Depreciation methods

LO11-2

On January 1, 2016, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles.

Required:

Calculate annual depreciation for the five-year life of the van using each of the following methods. Round all computations to the nearest dollar.

1. Straight line.

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

3. Double-declining balance.

4. Units of production using miles driven as a measure of output, and the following actual mileage: