On October 1st 2020 the Empire purchased the Millenium Falcon for $4,000,000 The Millenium Falcon is expected to serve the Empire for 12 years and have a $200,000 salvage The Empire expects to drive the Falcon 38,000,000 miles. In 2020 The Empire drove the Falcon 2,000,000 miles in 2021 the Empire drove the Falcon 5,000,000 miles Part 1: for 2020 and 2021 a) determine depreciation expense and the book value of the asset on December 31 under al) straight line depreciation A2) double declining balance depreciation a3) sum of the years depreciation 24) units of production depreciation Part 2: On January 1st 2022 The Empire put a hyper-drive into the Falcon. This hyper-drive will allow the Falcon to last 14 years instead of the original 12 years. 5 Make the journal entry for the Empire when it spent $200,000 on the hyper-drive (they paid Republic credits..cash) Determine 2022 straight line depreciation 1 Part 3: 1 Go back to part 1: On January 2nd 2022, The Millenium Falcon was destroyed in an asterlod storm. The Jabba-The-Hut Insurance company promptly paid $2,900,000 on the insurance claim. Make the journal entry the Empire makes because of this storm and insurance payment The Empire was using units of activity depreciation 3 4 5 Part 4 Go back to part 1 On January 3rd, 2022, the Empire exchanged the Millenium Falcon and $1,200,000 for a Death Star, The Death Star has a fair market value of $4,700,000. The Empire had depreciated the Falcon with the units of activity method