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Exercise: 4 Cost The following data for a small delivery truck purchased by Barb's Florists on January 1, 2005. $13,000. Expected salvage value $1000. Estimated
Exercise: 4 Cost The following data for a small delivery truck purchased by Barb's Florists on January 1, 2005. $13,000. Expected salvage value $1000. Estimated useful life(years) Estimated useful life(miles) 100,000 Miles driven: Y1 15,000 miles, Y2 30,000 miles, Y3 20,000 miles, Y4 25,000, Y5 10,000 Instructions: Calculate depreciation expenses for first year, and prepare the depreciation schedule for the estimated useful life using units of activity method. Depreciation schedule: Annual = depreciation Accumulated depreciation **Book value = Year Units of activity *Depreciation rate 2005 1300C 20C. 2006 3000 x 20% 2007 | 13000 x 20% 2008 (300 x 204 2009 13600 x 20% *Depreciation rate = ($13,000 - 1,000) /100,000 miles = $ 0.12 ** Book value - original cost - accumulated depreciation
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