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.

a.Using the depreciation template provided, determine the amount of depreciation expense for the third year under each of the following assumptions:

b.The company uses the straight-line method of depreciation.

c.The company uses the units-of-production method of depreciation.

1.The company uses the double-declining-balance method of depreciation.

2.Assuming straight line depreciation, prepare the journal entry for the third year.

3.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.

**There are three tabs on the excel SS.

Input amounts Record journal entry for depreciation expense for the third year: Cost Salvage value Depreciable cost Useful lfe Useful life in units of pro $0 Debit Credi $0 0 years Dec. 3 Depreciation Expense Accumulated Depreciation Equipment To record annual depreciation Record journal entry for asset disposal in the fourth year: Straight line method Formula Depreciable cost Cost- Salvage Value Debit Credi eful Dec. 3 Cash Accumulated Depreciation Loss on disposal Equipment To record disposal of equipment nnual depreciation ex Also, compute the straight line depreciation rate. The formula is 100% divided by the useful life in years Compute the straight line depreciation rate below: 0% 0 traight line depreciation #DIV/0! Depreci Depreciat Deprecia Accumul Book ated Valu Hnnual period able ion rate tion Year 4 Year 5 Costazhwve San Straight-Line Depreciation Units-of-Production Double-Declining Balance Input amounts Cost Salvage value Depreciable cost Useful life Useful life in units of production Record journal entry for depreciation expense for the third year $0 years Debit Credit Dec. 3 Depreciation Expense Accumulated Depreciation E To record annual depreciation Units of Production Ste Depreciation per unit Depreciable cost = Cost-Salvage Valu Record journal entry for asset disposal in the fourth year: Debit Credit Dec. 3 Cash Accumulated Depreciation Loss on disposal Depreciation per unit = Equipment To record disposal of equipment te Depreciation expense Depreciation per unit & Units of production 0.00 Depreciation expense Number Depreciation Depreciat Accumula Book of Units Annual period per unit ion ted Valu $0I' Cost ofRoam Ssrscits Straight-Line Depreciation Units-of-Production Double-Declining Balance Input amounts Cost Salage value Depreciable cost Useful life Useful life in miles $0 Record journal entrg for depreciation expense for the third gear $0 0 years Debit Credit Dec. 31 Depreciation Expense Accumulated Depreciation- Equipme To record annual depreciation Units of Production Step 1 Straight Line Rate 1002 Depreciable cost Cost Salvage Yalue Straight line depreciation rate Double-declining-balance rat 2% Straight-line rate 0% Double-declining-balance rate 0% Depreciation expense Double-Declining-balance rate Beginning-period book value $0 Depreciation ezpense Beginni Depreciat ion Boo ng of Depreci Period ion Rate Ezpense at Accumulated k Depreciation Yalu Annual period $0 Year 2 Year 3 Year 4 Straight-Line Depreciation |Units-of-Production Double-Declining Balance