At the beginning of the year, Orbit Airways purchased a used Boeing aircraft at a cost of
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At the beginning of the year, Orbit Airways purchased a used Boeing aircraft at a cost of $45 million. Orbit Airways expects the plane to remain useful for five years (3 million kilometers) and to have a residual value of $5 million. Orbit Airways expects the plane to be flown 750,000 kilometers the first year and 1.5 million kilometers the second year. Compute Orbit Airways’ first-year depreciation on the plane using the following methods:
a. Straight-line
b. Units-of-production
c. Double-declining-balance
Show the airplane’s book value at the end of the first year under the straight-line method.
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Related Book For
Financial Accounting
ISBN: 978-0132889711
1st Canadian Edition
Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper
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