Question
epreciation for Partial Periods Norman Delivery Company purchased a new delivery truck on April 1, 2019. Norman computes depreciation expense to the nearest whole month.
epreciation 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 $37,000 Truck's expected service life, years 5 Truck's expected service life, miles 170,000
Truck's residual value $3,000 Miles driven in 2019 10,000
Miles driven in 2020 16,000 REQUIRED:
- 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 method 2019
2020
c. Double-declining-balance method 2019
2020
d.Activity method
2019
2020
2 . Book Value/formulas
a.Straight-line method:
2019
2020
b.Sum-of-the-years'-digits method 2019
2020
c.Double-declining-balance method 2019
2020
d.Activity method
2019
2020
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Accounting What the Numbers Mean
Authors: David Marshall, Wayne McManus, Daniel Viele
12th edition
007802529X, 1259969525, 978-1260565492
