The Johnson Repair Shop purchased a new truck at a cost of $35,000. The truck has...

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The Johnson Repair Shop purchased a new truck at a cost of $35,000. The truck has a five year life expectancy and can be expected to provide service for 100,000 miles. At the end of the five years it is expected to have a trade-in value of $5,000. The truck did provide good service and was used to travel 35,000 miles in year 1, 20,000 miles in year 2, 18,000 miles in year 3, 15,000 miles in year 4 and 12,000 miles in year 5. Required: 1) Calculate the depreciable cost of the truck. 3) Calculate the annual depreciation for the truck using each of the following calculation procedures: a) straight line b) units of production c) declining balance method The Johnson Repair Shop purchased a new truck at a cost of $35,000. The truck has a five year life expectancy and can be expected to provide service for 100,000 miles. At the end of the five years it is expected to have a trade-in value of $5,000. The truck did provide good service and was used to travel 35,000 miles in year 1, 20,000 miles in year 2, 18,000 miles in year 3, 15,000 miles in year 4 and 12,000 miles in year 5. Required: 1) Calculate the depreciable cost of the truck. 3) Calculate the annual depreciation for the truck using each of the following calculation procedures: a) straight line b) units of production c) declining balance method

Answer rating: 100% (QA)

1 To calculate the depreciable cost of the truck we need to subtract the tradein value from the init... View the full answer