Assume that at the beginning of 2017, Foley Air purchased a Bombardier Q400 aircraft at a...
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Assume that at the beginning of 2017, Foley Air purchased a Bombardier Q400 aircraft at a cost of $29,000,000. Foley expects the plane to remain useful for five years (4,400,000 km) and to have a residual value of $4,750,000. Foley expects the plane to be flown 850,000 km the first year, 1,050,000 km each year during years 2 through 4, and 400,000 km the last year. 1. Compute Foley's first-year depreciation on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-diminishing-balance 2. Show the airplane's carrying amount at the end of the first year under each depreciation method. Requirement 1. Compute Foley's first-year depreciation on the plane. a. Using the straight-line method, depreciation is $ b. Using the units-of-production method, depreciation is $ (Hold all decimals during interim calculations. Round the final solution to the nearest whole number.) c. Using the double-diminishing-balance method, depreciation is $ Requirement 2. Show the airplane's carrying amount at the end of the first year under each depreciation method. (Use parentheses or a minus sign when subtracting numbers.) Units-of- Production Carrying amount: Cost Less: Accumulated depreciation Carrying amount Straight-Line Double-Declining- Balance Assume that at the beginning of 2017, Foley Air purchased a Bombardier Q400 aircraft at a cost of $29,000,000. Foley expects the plane to remain useful for five years (4,400,000 km) and to have a residual value of $4,750,000. Foley expects the plane to be flown 850,000 km the first year, 1,050,000 km each year during years 2 through 4, and 400,000 km the last year. 1. Compute Foley's first-year depreciation on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-diminishing-balance 2. Show the airplane's carrying amount at the end of the first year under each depreciation method. Requirement 1. Compute Foley's first-year depreciation on the plane. a. Using the straight-line method, depreciation is $ b. Using the units-of-production method, depreciation is $ (Hold all decimals during interim calculations. Round the final solution to the nearest whole number.) c. Using the double-diminishing-balance method, depreciation is $ Requirement 2. Show the airplane's carrying amount at the end of the first year under each depreciation method. (Use parentheses or a minus sign when subtracting numbers.) Units-of- Production Carrying amount: Cost Less: Accumulated depreciation Carrying amount Straight-Line Double-Declining- Balance
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Answer rating: 100% (QA)
1a StraightLine Depreciation Depreciation Expense StraightLine Cost Residual Value Useful Life Depreciation Expense StraightLine 29000000 4750000 5 ye... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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