Two Brother's Moving Company purchased a group of new moving trucks for a total amount of $125,000. The vehicles are expected to last five years due to the heavy use and have a residual/scrap/salvage value of $10,000 at the end of that life. Usage of the vehicle is tracked in miles and the vehicles in total are expected to last 2,000,000 miles. During year one 750,000 miles were used, during year two 600,000 miles were used, during year three 500,000 miles were used, during year four no miles were used due to a temporary closing of the moving line of business, and during year five 150,000 miles were used. Using the depreciation template provided, determine the amount of depreciation expense for the third year under each of the following assumptions: a. The company uses the straight-line method of depreciation. b. The company uses the units-of- production method of depreciation. C. de CUITPally uses lile uvuvie- declining-balance method of depreciation. 1. Assuming straight line depreciation, prepare the journal entry for the third year. 2. Assume the company sold the vehicles at the end of the fourth year for $50,000. Prepare a journal entry for asset disposal in the fourth year. 3. Assume you are the chief accountant of this company. Determine how you will choose, based on best industry practices, the depreciation method for them to use. Spreadsheets Straight-Line Depreciation Units-of-Production Double-Declining Balance ACT30 Principles of thing! Module & Crew Thinking Template Option repreciation Template Record journal entry for depreciation expense for the third year: Dec 31 Depreciation Expense Accued Degree Count Recordantry w ho in the furthy Accued Depreciate depresionate Spreadsheets Straight-Line Depreciation Units-of-Production Double-Declining Balance Deprecabile Depreciation Depreciation Spreadsheets + Straight-Line Depreciation Units-of-Production Double-Declining Balance Mode l Thinking Option 1 Depreciation template Unit of Production Depreciation Board journal entry for deprecation entre for the third year Des! Depreciation Aero w a y in the year Spreadsheets + Straight-Line Depreciation Units-of-Production Double-Declining Balance Deprecation per Depreciation re p orts of Spreadsheets + Straight-Line Depreciation Units-of-Production Double-Declining Balance ACTD PieseAg! Module & C al Thinking to preciation Template Recand journal entry for derection for the third year 1. Drinternet Spreadsheets + Straight-Line Depreciation Units-of-Production Double-Declining Balance Double-declining tabance Bondantry recompensohet Dec 31 Depreciation Experts Acumulated Depreciation.opment 10 U n units of produ 13 S M line method amm adow in the fourthy Depreca Accumulated Depreciation No, compute the line depreci a te the form 100 divided by the use in year 26 compute the straight line depreciation below Depreciable Depreciation Depreciation Endered Accumulated Book Depreciation Value Anna period 41 Tea Straight-Line Depreciation Units-of-Production Double Declining Balance entry for depreciation for the third Accumulated Depreciation Equipment To record annual depreciacion Deprecoorge Value SENAARRRRRIER End of Perio Depreciation for heriod Beginning of Peried Book Depreciation Depreciation Value Rate Expense Accumulated Depreciation Straight-Line Depreciation Units-of-Production Double Declining Balance
