ABC Company on Jan 1, 2021 purchased a delivery van for 23000. to complete the purchase the company also incurred a 800 shipping cost and 1200 sales tax. The company estimates that at the end of its four year service life, the van will be worth 4000. During the four year period, the company expects to drive the van 100000 miles. Actual miles driven each year were 20000 miles in year 1, 25000 miles in year 2, 45000 miles in year 3, 55000 miles in year 4.

Using straight line depreciation method, what is the annual depreciation expense?

Using the double declining balance method, what are the amounts of depreciation expense for year 2

Using activity based depreciation method, what is the balance of accumulated depreciation at the end of year 3

Suppose that the company decided on December 31 2022 year 2 that the useful life of the van will be 5 years total (instead of 4 years total). Assume the company uses the straight line method and the change will become more effective in 2023. What will be the amount of depreciation expense in 2023

Answer rating: 100% (QA)

So heres the conclusion Using the straight line depreciation method the annual depreciation expense ... View the full answer