Question
In early July 2019, Madden Enterprises purchased its first service vehicle for $46,000. The company adopted units-of-production (mileage) as the depreciation method. It was estimated
In early July 2019, Madden Enterprises purchased its first service vehicle for $46,000. The company adopted units-of-production (mileage) as the depreciation method. It was estimated that the vehicle would have a service life of 6 years and that mileage would total 120,000. Residual value was estimated at $10,000. After the first six months, the company concluded that vehicle usage was tied more to the type of service call than mileage. It was expected that service vehicles would be used more heavily in the first half of the service life. The company decided to change the depreciation method to double-declining-balance on January 1, 2020. Mileage in the first six months of operations totaled 12,000. What was depreciation expense in 2020? Select one: a. $10,466 b. $10,799 c. $13,799 d. $14,132 e. $12,954
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