American Airlines just bought a new service vehicle on the 1st January, 2019. The purchase price...
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American Airlines just bought a new service vehicle on the 1st January, 2019. The purchase price of this service vehicle was $350,000. In addition, American Airline had to pay $25,000 for transportation cost to get the vehicle in place. The company planned to use this service vehicle for next 10 years and estimated residual value after 10 years is $30,000. Required: a. Calculate the Depreciation Expenses for each year of 2019 and 2020 with the straight-line method. What should be the Book Value of the service vehicle at the end of 2020? b. Additional information: Suppose that the service vehicle will be driven up to 100,000 miles. This vehicle has been driven 20,000 miles and 30,000 in the year of 2019 and 2020 respectively. Calculate the Depreciation Expenses for each year of 2019 and 2020 with the Units of Production Method. What should be the Book Value of the Service Vehicle at the end of 2020? American Airlines just bought a new service vehicle on the 1st January, 2019. The purchase price of this service vehicle was $350,000. In addition, American Airline had to pay $25,000 for transportation cost to get the vehicle in place. The company planned to use this service vehicle for next 10 years and estimated residual value after 10 years is $30,000. Required: a. Calculate the Depreciation Expenses for each year of 2019 and 2020 with the straight-line method. What should be the Book Value of the service vehicle at the end of 2020? b. Additional information: Suppose that the service vehicle will be driven up to 100,000 miles. This vehicle has been driven 20,000 miles and 30,000 in the year of 2019 and 2020 respectively. Calculate the Depreciation Expenses for each year of 2019 and 2020 with the Units of Production Method. What should be the Book Value of the Service Vehicle at the end of 2020?
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Cost of asset purchase cost Add Transportation Capitalized cost 350000 25000 375000 Capitalize... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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