USE the Activity Based Method for questions 14 - 15

JMM Property management used the mowers as follows:

Year Activity (MH)

1 49,800

2 51,200

3 41,650

4 39,350

Question 7

14. Under activity based depreciation; what is the amount of depreciation expense they would have recorded for year 3? $___________________

Question 8

15. Under activity based depreciation; what is the book value at the end of year 3?

Question 9

16. During the first two years, MOM, Inc., drove the truck 71,500 and 66,950 miles, respectively, to deliver merchandise to its customers. The company originally purchased the truck for $153,200. If the truck has an estimated life of 7 years or 400,000 miles, with an estimated residual value of $45,200, what amount of depreciation expense should MOM record in the second year using the activity-based method?

Question 10

17. JM Corporation purchased equipment at the beginning of 2015 for $410,000. In 2015, 2016 and 2017, JM depreciated the asset on a straight-line basis with an estimated useful life of 7 years and a $60,000 residual value. What is the book value of the equipment at the beginning of 2018?

Question 11

18. AD Enterprises purchased equipment for $350,000 on January 1, 2015. The equipment is expected to have a ten-year life, with a residual value of $41,000 at the end of its service life. Using the double-declining balance method, determine depreciation expense for 2016 (the second year).

Question 12

19. AD Enterprises purchased equipment for $350,000 on January 1, 2015. The equipment is expected to have a ten-year life, with a residual value of $41,000 at the end of its service life. Using the straight-line method, determine book value at the end of 2016 (the second year).

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