*THE ANSWERS FOR QUESTIONS 1&2 ARE BELOW FOR REFERNCE, YOU ONLY NEED TO SOLVE QUESTION 3*

Submission file format: Excel document with all the answers, clearly identifying all steps, results, journals and including comments besides each answer.

Business case (100 points)

James has been running a delivery company for the last 10 years. He comes to ask you about several issues affecting his business:

James considered it necessary to renew part of the assets of the company, and in particular purchase a new fleet of trucks so as to increase the capacity of the company.

On 28th of March 2020, he purchased a new truck with an estimated useful life of 8 years for a total price of 165,000 and a residual value of 5,000.

On 25 of September James decides to purchase a building where to set up his office. In order to finance the purchase that will take place on the 1st of October, James will take a 20-year Mortgage for 900,000, with a 5% interest rate. James will have to refund the mortgage through monthly installment payments of 4.000.

James also plans to sell his professional SUV vehicle. He received an offer from an interested company who would purchase it for 29.000. The transaction would take place on December 31, 2020. Said vehicle was purchased on 1 of January 2016 for 85.000.

The accountant of Jamess company considered for depreciation purposes that this vehicle had a useful life of 6 years and a residual value of 5.000. The accountant used the double-declining balance method.

1. Prepare a complete depreciation schedule for the truck using the straight-line depreciation method. You will apply for the half-year convention. Explain your calculation and how the half-year convention will affect the depreciation expense of the period.

2. Prepare a complete depreciation schedule for the truck using the double-declining balance method for depreciation switching to straight line for the two last years.

**3. Calculate the amount of the gain or loss obtained in the sale of the vehicle, and prepare the journal entries.**

Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 Beginning Book Sraightline Straight Value Rate Depreciation 165,000.00 12.50% 10,000.00 155,000.00 12.50% 20,000.00 135,000.00 12.50% 20,000.00 115,000.00 12.50% 20,000.00 95,000.00 12.50% 20,000.00 75,000.00 12.50% 20,000.00 55,000.00 12.50% 20,000.00 35,000.00 12.50% 20,000.00 15,000.00 12.50% 10,000.00 Accumulated Depreciation 10,000.00 30,000.00 50,000.00 70,000.00 90,000.00 110,000.00 130,000.00 150,000.00 160,000.00 Ending Book Value 155,000.00 135,000.00 115,000.00 95,000.00 75,000.00 55,000.00 35,000.00 15,000.00 5,000.00 Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 Beginning Book DDB Rate Value 165,000.00 25% 123,750.00 25% 92,812.50 25% 69,609.38 25% 52,207.03 25% 39,155.27 25% 29,366.46 50% 14,683.23 50% 7,341.61 32% DDB Depreciation 41,250.00 30,937.50 23,203.13 17,402.34 13,051.76 9,788.82 14,683.23 7,341.61 2,341.61 Accumulated Depreciation 41,250.00 72,187.50 95,390.63 112,792.97 125,844.73 135,633.54 150,316.77 157,658.39 160,000.00 Ending Book Value 123,750.00 92,812.50 69,609.38 52,207.03 39,155.27 29,366.46 14,683.23 7,341.61 5,000.00 Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 Beginning Book Sraightline Straight Value Rate Depreciation 165,000.00 12.50% 10,000.00 155,000.00 12.50% 20,000.00 135,000.00 12.50% 20,000.00 115,000.00 12.50% 20,000.00 95,000.00 12.50% 20,000.00 75,000.00 12.50% 20,000.00 55,000.00 12.50% 20,000.00 35,000.00 12.50% 20,000.00 15,000.00 12.50% 10,000.00 Accumulated Depreciation 10,000.00 30,000.00 50,000.00 70,000.00 90,000.00 110,000.00 130,000.00 150,000.00 160,000.00 Ending Book Value 155,000.00 135,000.00 115,000.00 95,000.00 75,000.00 55,000.00 35,000.00 15,000.00 5,000.00 Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 Beginning Book DDB Rate Value 165,000.00 25% 123,750.00 25% 92,812.50 25% 69,609.38 25% 52,207.03 25% 39,155.27 25% 29,366.46 50% 14,683.23 50% 7,341.61 32% DDB Depreciation 41,250.00 30,937.50 23,203.13 17,402.34 13,051.76 9,788.82 14,683.23 7,341.61 2,341.61 Accumulated Depreciation 41,250.00 72,187.50 95,390.63 112,792.97 125,844.73 135,633.54 150,316.77 157,658.39 160,000.00 Ending Book Value 123,750.00 92,812.50 69,609.38 52,207.03 39,155.27 29,366.46 14,683.23 7,341.61 5,000.00