Natalle is also thinking of buying a van that will be used only for business. The cost of the van is estimated at $40,000. Natalie would spend an additional $3,000 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her miker inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $2,000. She expects the van to last about 5 years, and she expects to drive it for 228,750 miles. The annual cost of vehicle insurance will be $2,736. Natalie estimates that at the end of the 5 -year useful life the van will sell for $8,400. Assume that she will buy the van on August 15,2022, and it will be ready for use on September 1,2022 Natalie is concerned about the impact of the van's cost on her income statement and balance sheet. She has come to you for advice on calculating the van's depreciation. (a) Determine the cost of the van. Prepare three depreciation tables for 2022, 2023 and 2024: one for straight-line depreciation (similar to the one in lllustration 10-10), one for double-declining balance depreciation (iliustration 10-14), and one for units-of-activity depreciation (Itiustration 10-12). For units-of-activity, Natalie estimates she will drive the van as follows:17, 100 miles in 2022:51,300 miles in 2023; 57,000 miles in 2024;57,000 miles in 2025; and 46,350 miles in 2026. Recall that Cookie Creations has a December 31 year-end. (Round depreclation cost/unit to 3 declmal ploces, eg. 0.225.) Straight-line depreciation Double declining-balance depreciation Double-declining-balance depreciation Units-of activity depreciation Units-of activity depreciation Natalle is also thinking of buying a van that will be used only for business. The cost of the van is estimated at $40,000. Natalie would spend an additional $3,000 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her miker inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $2,000. She expects the van to last about 5 years, and she expects to drive it for 228,750 miles. The annual cost of vehicle insurance will be $2,736. Natalie estimates that at the end of the 5 -year useful life the van will sell for $8,400. Assume that she will buy the van on August 15,2022, and it will be ready for use on September 1,2022 Natalie is concerned about the impact of the van's cost on her income statement and balance sheet. She has come to you for advice on calculating the van's depreciation. (a) Determine the cost of the van. Prepare three depreciation tables for 2022, 2023 and 2024: one for straight-line depreciation (similar to the one in lllustration 10-10), one for double-declining balance depreciation (iliustration 10-14), and one for units-of-activity depreciation (Itiustration 10-12). For units-of-activity, Natalie estimates she will drive the van as follows:17, 100 miles in 2022:51,300 miles in 2023; 57,000 miles in 2024;57,000 miles in 2025; and 46,350 miles in 2026. Recall that Cookie Creations has a December 31 year-end. (Round depreclation cost/unit to 3 declmal ploces, eg. 0.225.) Straight-line depreciation Double declining-balance depreciation Double-declining-balance depreciation Units-of activity depreciation Units-of activity depreciation
