On January 1, 2024, Nimble Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, Nimble spent $3,000 painting it, $800 replacing tires, and $3,900 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,100. The truck's annual mileage is expected to be 20,000 miles in each of the first four years and 12,800 miles in the fifth year92,800 miles in total. In deciding which
On January 1, 2024, Nimble Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, Nimble spent $3,000 painting it, $800 replacing tires, and $3,900 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,100. The truck's annual mileage is expected to be 20,000 miles in each of the first four years and 12,800 miles in the fifth year-92,800 miles in total. In deciding which depreciation method to use, Jacob Nealy, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements. Requirement 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Begin by preparing a depreciation schedule using the straight-line method. On January 1,2024 , Nimble Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, Nimble spent $3,000 painting it, $800 replacing tires, and $3,900 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,100. The truck's annual mileage is expected to be 20,000 miles in each of the first four years and 12,800 miles in the fifth year-92,800 miles in total. In deciding which depreciation method to use, Jacob Nealy, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements. Units-of-Production Deoreciation Schedule Prepare a depreciation schedule using the double-declining-balance (DDB) method. (Round depreciation expense to the nearest whole dollar.) Double-Declining-Balance Depreciation Schedule On January 1, 2024, Nimble Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, Nimble spent $3,000 painting it, $800 replacing tires, and $3,900 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,100. The truck's annual mileage is expected to be 20,000 miles in each of the first four years and 12,800 miles in the fifth year-92,800 miles in total. In deciding which depreciation method to use, Jacob Nealy, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements. Prepare a depreciation schedule using the double-declining-balance (DDB) method. (Round depreciation expense to the nearest whole dollar.) Double-Declinina-Balance Deoreciation Schedule Requirement 2. Nimble prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. Consider the first year that Nimble uses the truck. Identify the depreciation method that meets the company's objectives. The depreciation method that reports the highest net income in the first year is the method. It produces the depreciation expense and therefore the highest net income. On January 1, 2024, Nimble Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, Nimble spent $3,000 painting it, $800 replacing tires, and $3,900 overhauling the engine. The truck should remain in service for five years and have a residual value of $5,100. The truck's annual mileage is expected to be 20,000 miles in each of the first four years and 12,800 miles in the fifth year-92,800 miles in total. In deciding which depreciation method to use, Jacob Nealy, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the Requirements 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. 2. Nimble prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. Consider the first year that Nimble uses the truck. Identify the depreciation method that meets the company's objectives. Before completing the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation expense per unit. (Round depreciation expense per unit to two decimal places.)
