On January1,

2024,

AdvancedAirlines

purchased a used airplane for

$66,000,000.

AdvancedAirlines

expects the plane to remain useful for

four

years

(5,000,000

miles) and to have a residual value of

$6,000,000.

The company expects the plane to be flown

1,500,000

miles during the first year.

Read the

requirements

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.

Requirement 1a. Compute

AdvancedAirlines's

first-year depreciation expense on the plane using thestraight-line method.

Begin by selecting the formula to calculate thecompany's first-year depreciation expense on the plane using thestraight-line method. Then enter the amounts and calculate the depreciation for the first year.

(

Cost

-

Residual value

)

Useful life

=

Straight-line depreciation

(

$66,000,000

-

$6,000,000

)

4

=

$15,000,000

Requirement 1b. Compute

AdvancedAirlines's

first-year depreciation expense on the plane using theunits-of-production method.

Before calculating thefirst-year depreciation expense on the plane using theunits-of-production method, calculate the depreciation expense per unit. Select theformula, then enter the amounts and calculate the depreciation per unit.

(

Cost

-

Residual value

)

Useful life in units

=

Depreciation per unit

(

$66,000,000

-

$6,000,000

)

5,000,000

=

$12

Now, select theformula, enter theamounts, and calculate thecompany's first-year depreciation expense on the plane using theunits-of-production method.

Depreciation per unit

Current year usage

=

Units-of-production depreciation

$12

1,500,000

=

$18,000,000

Requirement 1c. Compute

AdvancedAirlines's

first-year depreciation expense on the plane using thedouble-declining-balance method.

Begin by selecting the formula to calculate thecompany's first-year depreciation expense on the plane using thedouble-declining-balance method. Then enter the amounts and calculate the depreciation expense for the first year.(Enter "0" for items with a zerovalue.)

Double-declining-

(

-

)

=

balance depreciation

Compute

AdvancedAirlines's

first-year depreciation expense on the plane using thedouble-declining-balance method.

Begin by selecting the formula to calculate thecompany's first-year depreciation expense on the plane using thedouble-declining-balance method. Then enter the amounts and calculate the depreciation expense for the first year.(Enter "0" for items with a zerovalue.)