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Straight-Line Depreciation A small delivery truck was purchased on January 1 at a cost of $25,000. It has an estimated useful life of four years
Straight-Line Depreciation A small delivery truck was purchased on January 1 at a cost of $25,000. It has an estimated useful life of four years and an estimated salvage value of $5,000. Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the straight-line method. Small Delivery Truck Depreciation Schedule On January 1 Year Depreciable Cost x Rate (%) = Depreciation Expense 1 $ Accumulated Depreciation (End of Year) Book Value (End of Year) 2 3 4 MODIFIED ACCELERATED COST RECOVERY SYSTEM Year Cost x Rate = Accumulated Depreciation Depreciation Book Value Expense (End of Year) (End of Year) 1. Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the Modified Accelerated Cost Recovery System. For tax purposes, assume that the truck has a useful life of five years. (The IRS schedule will spread depreciation over six years.) If required, round your answers to the nearest dollar. If an answer is zero, enter "0", A small delivery truck was purchased on January 1 at a cost of $25,000. It has an estimated useful life of four years and an estimated salvage value of $5,000 and rates shown below: 1. Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the Modified Accelerated Cost Recovery System. For tax purposes, assume that the truck has a useful life of five years. (The IRS schedule will spread depreciation over six years.) If required, round your answers to the nearest dollar. If an answer is zero, enter "0". Small Delivery Truck Depreciation Schedule On January 1 1 $40,000 20.00% $8,000 $8,000 $32,000 2 40,000 32.00% 12,800 20,800 19,200 3 40,000 19.20% 7,680 28,480 11,520 4 40,000 11.52% 4,608 33,088 6,912 5 40,000 11.52% 4,608 37,696 2,304 6 40,000 5.76% 2,304 40,000 0 Year Cost x Rate (%) Depreciation Expense 1 $ $ 2 3 4 5 Accumulated Depreciation End of Year Book Value End of Year 00000
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