Assume that at the beginning of 2015 Quick Air purchased a used Jumbo 747 aircraft at a cost of $56,700,000. QuickAir expects the plane to remain useful for five years (5,000,000 miles) and to have a residual value of $4,700,000. QuickAir expects to fly the plane 775,000 miles the first year, 1,200,000 miles each year during the second, third, and fourth years, and 625,000 miles the last year?
1. Compute QuickAir's depreciation for the first two years on the plane using the following methods:
a. Straight-line method.
b. Units-of-production method (round depreciation per mile to the closest cent).
c. Double-declining-balance method.
2. Show the airplane's book value at the end of the first year under each depreciation method?