Question
-----Straight-Line Method: 1. Corales Company acquires a delivery truck at a cost of $38,000. The truck is expected to have a salvage value of $6,000
-----Straight-Line Method:
1. Corales Company acquires a delivery truck at a cost of $38,000. The truck is expected to have a salvage value of $6,000 at the end of its 4-year useful life.
Compute annual depreciation expense for the first and second year using straight line method.
------Double Declining Method:
.
2. Depreciation information for Corales Company is given above. Assuming the declining-balance depreciation rate is double the straight-line rate.
Compute annual depreciation for the first and second years under the double declining method.
---------Units of Activity Method:
3. Rosco Taxi Service uses the units of activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi no. 1o cost $39,500 and is expected to have a salvage value of $500. Taxi no. 10 is driven 30,000 miles in year 1 and 20,000 miles in year 2.
Compute the depreciation for each year.
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