Question
Flowerworks Corporation purchases a vehicle for $35,200 to deliver flowers to the surrounding community. Flowerworks estimates that at the end of its four-year useful life,
Flowerworks Corporation purchases a vehicle for $35,200 to deliver flowers to the surrounding community. Flowerworks estimates that at the end of its four-year useful life, the delivery vehicle will be worth $6,000. During the four-year period, the company plans to drive the vehicle 182,500 miles.
Actual miles driven each year were 48,000 miles in year 1 and 54,000 miles in year 2.
Required:
Calculate annual depreciation for the first two years of the vehicle using each of the following methods.
1. Straight-line.
Year Annual Depreciation
Year 1:
Year 2:
2. Double-declining-balance.
Year Annual Depreciation
Year 1:
Year 2:
3. Activity-based.
Year Annual Depreciation
Year 1:
Year 2:
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