On January 1, 2017 , Northeast USA Transportation Company purchased a used aircraft at a cost of $ 53,000,000. Northeast USA expects the plane to remain useful for five years (7,300,000 miles) and to have a residual value of $ 5,000,000. Northeast USA expects to fly the plane 700,000 miles the first year, 1,250,000 miles each year during the second, third, and fourth years, and 2,850,000 miles the last year.

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1. Compute Speedy Delivery'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 $ 9,200,000 for 2017 and $ 9,200,000 for 2018. b. Units-of-production method (Round the depreciation per unit of output to two decimal places to compute your final answers.) Using the units-of-production method, depreciation is $ 5,664,000 for 2017 and $ 9,027,000 for 2018. c. Double-declining balance method Using the double-declining-balance method, depreciation is $ 20,280,000 for 2017 and $ 12,168,000 for 2018. 2. Show the airplane's book value at the end of the first year under each method. Units-of- Double-Declining- Book Value: Production Balance Cost Straight-Line 50,700,000 $ (9,200,000) 50,700,000 $ (5,664,000) 50,700,000 (20,280,000) Less: Accumulated depreciation $ Book Value 41,500,000 $ 45,036,000 $ 30,420,000 This question is complete Move your cursor over or tap on the red arrows to see incorrect answers