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ssume you have a flower shop and you bought a delivery van for $32,000. You expect the van to remain in service r three years
ssume you have a flower shop and you bought a delivery van for $32,000. You expect the van to remain in service r three years (147,000km). At the end of its useful life, you estimate that the van's residual value will be $1,130. ou estimate the van will travel 39,000km the first year, 59,000km the second year, and 49,000km the third year. repare an estimate of the depreciation expense per year for the van under the three depreciation methods. Show our computations. hich method do you think tracks the useful life cost on the van most closely? How does management determine hich depreciation method to use? egin by calculating straight-line depreciation expense for each year. (Round the amounts for depreciation xpense to the nearest whole dollar.) Next show your computations for units-of-production depreciation expense for each year. (Round in calculations to two decimal places. Round the amounts for depreciation expense to the neare dollar. For years with $0 depreciation, make sure to enter " 0 " in the appropriate column.) How does management determine what depreciation method to use? A. Management should choose the depreciation method that charges the smallest depreciation expense in the current year. B. Management should choose a depreciation method that reflects the pattern in which the asset will be used. C. Management should choose the depreciation method that charges the largest depreciation expense in the current year D. Management should choose a depreciation method that gives them the largest potential for future growth Then show your computations for double-diminishing-balance method of depreciation. (Round intermedia calculations to two decimal places. Round the amounts for depreciation expense to the nearest dollar. For years with $0 depreciation, make sure to enter " 0 " in the appropriate column.)
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