1. Speedy Taxi Service purchased a new cab for $33,500. It is expected to have a salvage value of $1000 and a life of 3 years. The cab is expected to be driven 150,000 miles over those three years. It has been driven 30,000 miles in year 1 and 20,000 miles in year 2.
   1. Compute the annual depreciation for the first two years under each of the following methods:
      1. Straight Line
      2. Units-of-Activity
      3. Double-Declining

If you were the owner of the Taxi Service, which method and why would you deem most appropriate?Summit Company sells equipment on June 30, 2020. The equipment originally cost $45,000 and as of December 31, 2019 had accumulated depreciation of $24,000. Depreciation expense for the first six months of 2020 is $4,000.

Prepare the journal entries to record the depreciation expenses up to the date of sale and to record the sale of the equipment in these two independent situations. (Sales price Book value = gain or loss)

1. Sold for $25,000 on June 30, 2020
2. Sold for $10,000 on June 30, 2020

#	Account Titles and Explanation	Ref	Debit	Credit

EXTRA CREDIT: Match the statement with the term most directly associated with it.

Goodwill

Intangible Assets

Research and development costs

Amortization

Franchises

1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.___________________________________
2. The excess of cost of a company over the fair value of the net assets acquired.___________________________________
3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area._______________________________________
4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.________________________________________________
5. The allocation of the cost of an intangible asset to expense in a rational and systematic manner._________________________________________________