On January 1, Speedy Delivery Company purchases a delivery van for $90,000. Speedy estimates that at the
Question:
On January 1, Speedy Delivery Company purchases a delivery van for $90,000. Speedy estimates that at the end of its six-year service life, the van will be worth $30,000. During the six-year period, the company expects to drive the van 200,000 miles.
Required:
Calculate annual depreciation for the first two years using each of the following methods. Round all amounts to the nearest dollar.
1. Straight-line.
2. Double-declining-balance.
3. Activity-based.
Actual miles driven each year were 32,000 miles in year 1 and 35,000 miles in year 2.
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