On January 1, 2018, Advanced Airline purchased a used airplane at a cost of $60,500,000. Advanced Airline expects the plane to remain useful for eight years (5,000,000 miles) and to have a residual value of $5,500,000. Advanced Airline expects the plane to be flown 1,100,000 miles the first year and 1,200,000 miles the second year.

Requirements

1. Compute second-year (2019) depreciation expense on the plane using the following methods:

a. Straight-line

b. Units-of-production

c. Double-declining-balance

2. Calculate the balance in Accumulated Depreciation at the end of the second year for all three methods.