Question 2:

On January 1, Delaney Company purchased a delivery truck for $46,000 cash that has an estimated salvage value of $4,000 and an estimated useful life of 10 years. They use the double-declining balance method.

1. Calculate the gain or loss for Delaney Company if they sell the delivery truck for $35,000 cash on the last day of Year 2 after recording depreciation for Year 2. Label your answer as a gain or loss.

2. Calculate the net cash flow impact to Delaney from this asset and show that its equal to the income statement impact. You must show the details of how you calculated the amounts.

Question 3

The PPE footnote for S. Drew Company appears below. Drew uses the straight-line method, and PPE has a 20% salvage value.

	2019	2018
PPE, Cost	3,750	3,750
Accumulated Depreciation	(400)	(350)
PPE, Net	3,350	3,400

a. What is the depreciation expense for 2019?

b. What is the age of the assets at the end of 2019?

c. What is the % of the assets used at the end of 2019? Round to the nearest percent.