What impact will the three methods of depreciation have on Natalie's balance sheet at December $31,2020?$ What impact will the

three methods have on Natalie's income statement in $2020?$

Lowest amount of net income

Lowest amount of stockholders' equity

Lowest net book value

Greatest amount of net income

Greatest amount of stockholders' equity

Greatest net book value Double$-$declining$-$balance depreciation Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $$36,500.$ Natalie would spend

an additional $$2,500$ to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room

to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is

estimated at $$1,500.$ She expects the van to last about $5$ years, and she expects to drive it for $200,000$ miles. The annual cost of vehicle

insurance will be $$2,400.$ Natalie estimates that at the end of the $5-$year useful life the van will sell for $$7,500.$ Assume that she will

buy the van on August $15,2020,$ and it will be ready for use on September $1,2020.$

Natalie is concerned about the impact of the van's cost on her income statement and balance sheet. She has come to you for advice on

calculating the van's depreciation.

$($a$)$

Your answer is correct.

Determine the cost of the van.

Cost of the van $

eTextbook and Media

Attempts: $1$ of $3$ used

$($b$)$

Prepare three depreciation tables for $2020,2021,$ and $2022$: one for straight$-$line depreciation $($similar to the one in Illustration

$9\mathrm{.}10),$ one for double$-$declining balance depreciation $($Illustration $9\mathrm{.}14),$ and one for units$-$of$-$activity depreciation $($Illustration

$9\mathrm{.}12).$ For units$-$of$-$activity, Natalie estimates she will drive the van as follows: $15,000$ miles in $2020$;$45,000$ miles in $2021$; $50,000$

miles in $2022$; $45,000$ miles in $2023$; $40,000$ miles in $2024.$ Recall that Cookie Creations has a December $31$ year$-$end. $($Round

depreciation cost$/$unit to $3$ decimal places, e$.$g$.0\mathrm{.}225.)$

Straight$-$line depreciation