Speedy Delivery Company purchases a delivery van for $40,000. Speedy estimates that at the end of its five-year service life, the van will be worth $10,000. During the five-year period, the company expects to drive the van 100,000 miles.

Required:

Calculate annual depreciation for the four-year life of the van using each of the following methods. Round all amounts to the nearest dollar.

1. Straight-line.

2. Double-declining-balance.

3. Activity-based.

Actual miles driven each year were 23,000 miles in year 1; 17,000 miles in year 2; 19,000 miles in year 3; 22,000 miles in year 4; and 21,000 miles in year 5. Note that actual total miles of 102,000 exceed expectations by 2,000 miles.