Brees Corporation purchased a delivery van for $35,500 in 2010. The firm's financial condition immediately prior to

Question:

Brees Corporation purchased a delivery van for $35,500 in 2010. The firm's financial condition immediately prior to the purchase is shown in the following horizontal statements model.

The van was expected to have a useful life of 150,000 miles and a salvage value of $5,500. Actual mileage was as follows.
2010 50,000
2011 70,000
2012 58,000
Required
a. Compute the depreciation for each of the three years, assuming the use of units-of-production depreciation.
b. Assume that Brees earns $21,000 of cash revenue during 2010. Record the purchase of the van and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the preceding one.
c. Assume that Brees sold the van at the end of the third year for $4,000. Calculate the amount of gain or lose from thesale.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...