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E7-40B. (Learning Objective 3: Determine depreciation amounts by three methods) Langley Pizza bought a used Chevrolet delivery van on January 2, 2016, for $18,600. The
E7-40B. (Learning Objective 3: Determine depreciation amounts by three methods) Langley Pizza bought a used Chevrolet delivery van on January 2, 2016, for $18,600. The van was expected to remain in service for four years (57,000 miles). At the end of its useful life, Langley officials estimated that the van's residual value would be $1,500. The van traveled 20,500 miles the first year, 16,000 miles the second year, 15,400 miles the third year, and 5,100 miles in the fourth year. Requirements 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods discussed in this chapter. (For units-of-production and double-declining-balance methods, round to the nearest two decimal places after each step of the calculation.) 2. Which method best tracks the wear and tear on the van? 3. Which method would Langley prefer to use for income tax purposes? Explain in detail why Langley would prefer this method
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