Exercise 6-14 Depreciation calculation methods LO 3

Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $23,000 and has an estimated useful life of four years and an estimated salvage value of $4,500.

Required:

a-1. Calculate depreciation expense for each year of the truck?s life using Straight-line depreciation.

depreciation expense

?

Per year

a-2. Calculate depreciation expense for each year of the truck?s life using Double-declining-balance depreciation.

Year	depreciation expense
1	?
2	?
3	?
4	?

b. Calculate the truck's net book value at the end of its third year of use under each depreciation method.

Depreciation method	Net Book Value
Straight-line depreciation	?
Double-declining-balance depreciation	?

c. Assume that Kleener Co. had no more use for the truck after the end of the third year and that at the beginning of the fourth year it had an offer from a buyer who was willing to pay $6,350 for the truck. Should the depreciation method used by Kleener Co. affect the decision to sell the truck?

? yes

? no

Exercise 6-14 Depreciation calculation methods LO 3

Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $27,000 and has an estimated useful life of four years and an estimated salvage value of $4,700.

Required:

a-1. Calculate depreciation expense for each year of the truck?s life using Straight-line depreciation.

depreciation expense

$ 5,575

Per year

a-2. Calculate depreciation expense for each year of the truck?s life using Double-declining-balance depreciation.

Year	depreciation expense
1	$ 13,500
2	$ 6750
3	$ ?
4	0

b. Calculate the truck's net book value at the end of its third year of use under each depreciation method.

Depreciation method	Net Book Value
Straight-line depreciation	?
Double-declining-balance depreciation	?

Exercise 6-14 Depreciation calculation methods LO 3 Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $23,000 and has an estimated useful life of four years and an estimated salvage value of $4,500. Required: a-1. Calculate depreciation expense for each year of the truck's life using Straight-line depreciation. depreciation expense ? Per year a-2. Calculate depreciation expense for each year of the truck's life using Double-declining-balance depreciation. Year 1 2 3 4 depreciation expense ? ? ? ? b. Calculate the truck's net book value at the end of its third year of use under each depreciation method. Depreciation method Straight-line depreciation Double-declining-balance depreciation Net Book Value ? ? c. Assume that Kleener Co. had no more use for the truck after the end of the third year and that at the beginning of the fourth year it had an offer from a buyer who was willing to pay $6,350 for the truck. Should the depreciation method used by Kleener Co. affect the decision to sell the truck? yes no Exercise 6-14 Depreciation calculation methods LO 3 Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $27,000 and has an estimated useful life of four years and an estimated salvage value of $4,700. Required: a-1. Calculate depreciation expense for each year of the truck's life using Straight-line depreciation. depreciation expense $ 5,575 Per year a-2. Calculate depreciation expense for each year of the truck's life using Double-declining-balance depreciation. Year 1 2 3 4 depreciation expense $ 13,500 $ 6750 $? 0 b. Calculate the truck's net book value at the end of its third year of use under each depreciation method. Depreciation method Straight-line depreciation Double-declining-balance depreciation Net Book Value