Luric Company purchased a new car on July 1, 2002, for $15,000. The estimated life of the car was four years or 104,000 miles, and its salvage value was estimated to be $2,000. The car was driven 9,000 miles in 2002 and 27,000 miles in 2003. 1. Compute the amount of depreciation expense for 2002 and 2003 using the following methods:

a. Straight-line.

b. Units-of-production. 2. Which depreciation method more closely reflects the used-up service potential of the car? Explain.