Three different companies each purchased trucks on January 1, 2016, for $54,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 75,000 miles in 2016, 60,000 miles in 2017, 50,000 miles in 2018, and 70,000 miles in 2019. Each of the three companies earned $41,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

1.

value: 10.00 points

Required information

Required:

a-1.	Calculate the net income for 2016? (Round your "Per Unit Cost" to 3 decimal places.)

a-2.

Which company will report the highest amount of net income for 2016?

	Company A
	Company B
	Company C
	All of the above

References

eBook & Resources

WorksheetLearning Objective: 08-02 Explain how straight-line depreciation affects financial statements.Learning Objective: 08-04 Explain how units-of-production depreciation affects financial statements.

Difficulty: 2 MediumLearning Objective: 08-03 Explain how double-declining-balance depreciation affects financial statements.

Check my work

2.

value: 10.00 points

Required information

b-1.	Calculate the net income for 2019? (Round your "Per Unit Cost" to 3 decimal places.)

b-2.

Which company will report the lowest amount of net income for 2019?

	Company A
	Company B
	Company C
	All of the abov

3.

value: 10.00 points

Required information

c-1.	Calculate the book value on the December 31, 2018, balance sheet? (Round your "Per Unit Cost" to 3 decimal places.)

c-2.

Which company will report the highest book value on the December 31, 2018, balance sheet?

	Company A
	Company B
	Company C
	All of the above