Taylor Construction purchased a truck for $64,000 on January 1, 2016. Taylor installed a custom towing package and a winch for an additional $2,667. Sales tax was 5% of the selling price. The annual commercial vehicle license and insurance were an additional $2,500. The truck had an estimated useful life of eight years and a residual value of $11,000. Taylor expects the truck to run for 200,000 miles. Taylor uses double-declining-balances depreciation and expenses all repairs and maintenance costs under $2,000. Taylor incurred the following additional costs over the life of the truck:

Date	Description	Cost
12/31/17	New tires	$ 1,500
12/31/19	New engine	$ 10,000
12/31/19	New tires	$ 1,500

Required:

1. Assume the estimated residual value and useful life remain constant over the trucks life and that truck was sold for $20,000 on December 31, 2020. Complete the following table.

Depreciation Maintenance Expense Gain/(Loss) on Sale Net Expense

2016

2017

2018

2019

2020 ___________ ___________________ ________________ __________

Total

2. Repeat Questions #1 assuming Taylor depreciates the truck based on the number of miles driven. The following table shows the number of miles driven by year:

Year	Miles Driven
2016	50,000
2017	35,000
2018	15,000
2019	60,000
2020	20,000

3. The CEO of Taylor is paid a year-end bonus based on the firms net profit margin ratio. She has been lobbying the CFO to switch to straight-line depreciation. Explain why she would prefer straight-line depreciation to either declining-balance or units-of-production.

4. Prepare the journal entries necessary to record the sale of the truck for $20,000 under both option (1) and (2) on December 31, 2020.