Question 3

On January 1, 2020, Logan Service Transportation Company purchased a used aircraft at a cost of $61,400,000. Logan Service expects the plane to remain useful for five years (7,300,000 miles) and to have a residual value of $5,400,000. Logan Service expects to fly the plane 775,000 miles the first year, 1,300,000 miles each year during the second third, and fourth years, and 2,625,000 miles the last year. Read the requirements. 1. Compute Logan Service's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is for 2020 and for 2021