Question
On January 8, 2012, Speedway Delivery Service purchased a truck at a cost of $65,000. Speedway uses a calendar year. Before placing the truck in
On January 8, 2012, Speedway Delivery Service purchased a truck at a cost of $65,000. Speedway uses a calendar year. Before placing the truck in service, Speedway spent $4,000 painting it, $2,500 replacing tires, and $8,000 overhauling the engine. The truck should remain in service for 5 years and have a residual value of $6,000. The trucks expected total mileage is 100,000 miles over its useful life. The trucks actual annual mileage is expected to be: 20,000 2012, 22,000 2013, 21,000 2014, 22,000 2015, 21,000 2016.
In deciding which depreciation method to use, David Greer, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double declining balance). He also has asked for schedules showing how the depreciation expense would change if the asset was purchased on May 1, 2012.
Asset Cost:
Depreciable Cost:
Depreciation per unit (mile):
| Straight-Line Depreciation Schedule January purchase | |||||||||
| Depreciation for the Year | |||||||||
|
Date |
Asset Cost |
Depreciable Cost | Depreciation Rate = |
Depreciation Expense |
Accumulated Depreciation |
Book Value | |||
|
1-08-2012 | |||||||||
|
12-31-2012 | |||||||||
|
12-31-2013 | |||||||||
|
12-31-2014 | |||||||||
|
12-31-2015 | |||||||||
|
12-31-2016 | |||||||||
| Units-of-Production Depreciation Schedule | |||||||
| Depreciation for the Year | |||||||
|
Date |
Asset Cost |
Depreciation Per Unit |
Number of Units = |
Depreciation Expense |
Accumulated Depreciation |
Book Value | |
|
1-03-2012 | |||||||
|
12-31-2012 | |||||||
|
12-31-2013 | |||||||
|
12-31-2014 | |||||||
|
12-31-2015 | |||||||
|
12-31-2016 | |||||||
| Double Declining Balance Schedule January purchase | |||||||||
| Depreciation for the Year | |||||||||
|
Date |
Asset Cost |
Book Value | Depreciation Rate = |
Depreciation Expense |
Accumulated Depreciation |
Book Value | |||
|
1-08-2012 | |||||||||
|
12-31-2012 | |||||||||
|
12-31-2013 | |||||||||
|
12-31-2014 | |||||||||
|
12-31-2015 | |||||||||
|
12-31-2016 | |||||||||
| Straight Line Depreciation Schedule May purchase | ||||||
| Depreciation for the Year | ||||||
|
Date |
Asset Cost |
Depreciable Cost |
Depreciation Rate |
Depreciation Expense |
Accumulated Depreciation |
Book Value |
|
5-01-2012 | ||||||
|
12-31-2012 | ||||||
|
12-31-2013 | ||||||
|
12-31-2014 | ||||||
|
12-31-2015 | ||||||
|
12-31-2016 | ||||||
|
12-31-2017 |
| Double Declining Balance Schedule May purchase | |||||||||
| Depreciation for the Year | |||||||||
|
Date |
Asset Cost |
Book Value | Depreciation Rate = |
Depreciation Expense |
Accumulated Depreciation |
Book Value | |||
|
5-01-2012 | |||||||||
|
12-31-2012 | |||||||||
|
12-31-2013 | |||||||||
|
12-31-2014 | |||||||||
|
12-31-2015 | |||||||||
|
12-31-2016 | |||||||||
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Business Process Modeling Simulation And Design
Authors: Manuel Laguna, Johan Marklund
3rd Edition
1138061735, 978-1138061736
