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Part B Seagull Company purchases a delivery van for $23,500. Seagull estimates a four-year service life and a residual value of $2,500. During the four-year
Part B Seagull Company purchases a delivery van for $23,500. Seagull estimates a four-year service life and a residual value of $2,500. During the four-year period, the company expects to drive the van 105,000 miles. Actual miles driven each year were 26,000 miles in Year 1, 28,000 miles in Year 2, 24,000 miles in Year 3, and 27,000 miles in Year 4.
Calculate annual depreciation for the four-year life of the van using each of the following methods:
- Straight-line
- Double-declining-balance (For the fourth year, set depreciation to be equal to the amount needed to reduce the remaining book value to the residual value.)
- Activity-based
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