On January 1,

2017,

Alaska Freight

Transportation Company purchased a used aircraft at a cost of

$55,400,000.

Alaska Freight

expects the plane to remain useful for

five

years

(6,500,000

miles) and to have a residual value of

$5,400,000.

Alaska Freight

expects to fly the plane

825,000

miles the first year,

1,225,000

miles each year during the second, third, and fourth years, and

2,000,000

miles the last year.Read the requirements

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Part 1

1. Compute

Alaska Freight's

depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method.

a. Straight-line method

Using the straight-line method, depreciation is $

for 2017 and $

for 2018.