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The University purchased a truck that it intended to use for maintenance around campus. The purchase price from the dealership was $ 4 0 ,
The University purchased a truck that it intended to use for maintenance around campus. The purchase price from the dealership was $ Additional enhancements were made to the truck including a rack $ trailer hitch $ and bedliner $ The truck was purchased and delivered on July but was damaged when parked. The repairs cost $ to restore the vehicle.
The truck is expected to be used for years or hours by the University however the truck should last for years or hours. The truck is expected to have a residual value of $ The vehicle was used for hours in the hours in and hours in
The University has a December year end.
Required:
a Calculate the depreciation, accumulated depreciation and net book value for the first three years assuming straight line depreciation.
b Calculate the deprecation, accumulated deprecation and net book value for the first three years using double declining deprecation.
c Calculate the deprecation, accumulated deprecation and net book value for the first three years using units of production method operating hours
d Which method will result with the highest net income?
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